UBS and a number of other big banks have been working for years on the development of a digital currency. Now the group has received the backing of six other major companies.
Credit Suisse (CS), Barclays, Canadian Imperial Bank of Commerce, HSBC, Mitsubishi UFJ Financial Group and State Street have agreed to join the UBS-led group that is developing the Utility Settlement Coin (USC), the «Financial Times» reported today (behind paywall).
UBS already had the support of Deutsche Bank, Santander, BNY Mellon and ICAP for its project.
Launch in 2018
UBS developed USC in 2015 in the Level 39 incubator in London. The currency is designed to help migrate financial transactions to the Blockchain technology. The financial market expects faster, safer and cheaper settlements of transactions.
The project managers expect to launch the currency at the end of 2018, according to Hyder Jaffrey, the head of strategic investments and fintech innovation at UBS. He told the U.K.-based newspaper that the bank was in talks with central banks and regulators.
Foreign Exchange Use First
USC first will be used between banks for the settlement of foreign exchange transactions. The plan is to later extend its use to securities transactions. For this purpose, the banks need to move the securities to Blockchain to enable the banks to reap the benefits of the technology.
Should central banks in the future launch their own Blockchain-based currencies, USC would become obsolete. Jaffrey told the «Financial Times» that it will take years for this to happen.