UK Finance, the organization representing the UK’s banking and financial services industry, aims to broaden the scope of its ongoing experiment with a collaborative ledger system for recording transactions between financial institutions.
Perfect Participants for the Pilot Testing
Through this proposal, the organization aims to bridge some gaps and make connections in the emerging field of cryptocurrency.
UK Finance reports that major banks and financial companies, such as Barclays Plc, Lloyds Banking Group Plc, Citigroup Inc., Mastercard Inc., and Visa Inc., are participating in the trial stage for the proposed new service.
Gilbert Verdian, CEO of Quant, admitted that the pilot project, running for the past two months, is being overseen by his company specializing in interoperable blockchain networks. The aim is to supply the necessary technology for this trial period. UK Finance plans to release the findings from this experiment by August.
This is an important achievement for the industry association, signaling progress toward creating a commercial system for tokenized deposits and securities that all banks can adopt. This development follows the recommendation in a UK government Technology Working Group report encouraging businesses to collaborate on realizing tokenization objectives.
The BIS, along with global central banks and the private sector, are collaborating on Project Agorá to improve money systems across jurisdictions using tokenization and smart contracts.
Benefits of Utilizing Tokenized Deposits
Significantly, UK Finance’s tokenized deposits will attract more assets represented by tokens on a single blockchain in the future. The ultimate goal is to facilitate smoother and quicker transactions between various borders and systems over the long term.
Moreover, these deposits converted into tokens will aid financial institutions in minimizing mistakes and potential fraud. At present, there are no intentions to market the trial system. Firms would need to employ this platform for approximately two to three years before it becomes available for profitable usage.
Starting from July, UK Finance welcomes fintech and tech firms to join their program. After being accepted, these companies can initiate trials of innovative products using digitized banking funds, as announced by Verdian.
In a recent interview, it was mentioned that banks recognize the importance of programmable payments now. This is a significant shift for them as it allows businesses to operate more effectively by eliminating the restrictions imposed by the existing payment system.
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2024-04-16 02:35