New Utility Settlement Coin to Run on Blockchain Techonology

Last week, four major banks announced that they are collaborating, along with ICAP, a UK-based voice and electronic dealer broker, in order to produce a “utility settlement coin” (USC) that is run on blockchain technology, according to a recentBank Innovation article.

The USC aims to help banks process financial transactions without intermediaries, leading to an industry savings between $65 and $80 million, says Bank Innovation.

The USC is a purely digital coin, which will be run on a blockchain. However, according to sources at ICAP, the USC should not be classified as a “bankcoin”, but should really be thought of as an asset-backed digital security, one which will behave exactly like its partnered fiat currency.

While this development indicates significant traction for the use of digital assets, others in the blockchain industry havesuggested that the USC could lead to a more fragmented currency landscape.

If USC is implemented on schedule and runs according to the current model, Bank Innovation states that this will be the first online security of its kind to launch and be backed by banks.

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