Some international and central banks are experimenting with blockchain technology for debt issuance. These banks are JP Morgan, the National Bank of Canada, Goldman Sachs, and many other companies.
Enterprises Experimenting With Blockchain Technology
As reported by Reuters, these enterprises and banks have been testing a new blockchain platform for issuing financial instruments. The main purpose is to streamline origination, settlement, interest rate payments and other processes.
The banks and companies were using a platform that was built over more than a year using Quorum, a blockchain network developed by JP Morgan. The participants in the experiment were the fund management arm of Goldman Sachs Group Inc. Goldman Sachs Asset Management, Pfizer Inc, and Legg Mason Inc’s Western Asset.
The banks are working with this technology in order to reduce transactional cost, process cross-border payments, and for securities settlement.
“Blockchain-related technologies have the potential to bring about major change in the financial services industry,” commented David Furlong, senior vice president of artificial intelligence, venture capital and blockchain at the National Bank of Canada.
Umar Farooq, head of blockchain initiatives at JP Morgan, explained in an interview that there is an interest in the Quorum’s network developed by the bank. Moreover, he said that other financial institutions, which he did not mention by name, and large technological companies are also interested in Quorum.
But Mr, Farooq and the bank believes that blockchain technology did not show as much as what is discussed in the media. Apparently, they expect to see more mainstream applications of blockchain technology.
Umar Farooq said:
“We haven’t really seen a lot of really large scale things go into production yet. There are few cases where blockchain can really shine.”
Blockchain Technology for Banks
Different banks from all over the world are using blockchain technology so as to improve different aspects of their businesses. Of course, central banks are also using different distributed ledgers as well.
We can mention that Bank of America is testing different blockchain products that would allow it to compete with the increased financial competition related to cryptocurrencies. Santander Group, another recognised bank, has already developed different products using distributed ledger technology and soon they will be released to the market.
Central banks from different countries are also testing blockchain technology. Even more, they are working in developing their own virtual currencies. Ripple and its network are helping dozens of central banks to make their transactions and services more efficient.
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