Blockchain is popularly known as the technology underpinning bitcoin, but more and more institutions are looking at the technology for other uses.
Last week, reports surfaced that several big banks including Citigroup, Credit Suisse Group AG and HSBC Holdings PLC have started testing the blockchain technology to share trade reference data “more accurately and efficiently.”
In Japan, the Bank of Tokyo-Mitsubishi UFJ (BTMU) recently partnered with tech giant IBM to examine the design, management and execution of contracts using blockchain technologies. The first pilot projects will automate business transactions between the two companies.
The project is built on the Hyperledger Project fabric, which is an open-source blockchain platform that can be used for real-life contract management on the IBM Cloud.
Blockchain makes use of cryptography to create a distributed ledger system, which is often used to hold and spend money in a more open, transparent and flexible manner compared to the traditional bank or credit card companies. For this project, IBM and BTMU have built a prototype of smart contracts on a blockchain to improve the efficiency and accountability of service level agreements in multi-party business interactions.
BTMU, one of Japan’s largest bank, recently made headline when it announced that it is gearing up to launch its own digital currency in 2017. That currency is called MUFG coin, which the bank hopes will help “facilitate conversions to foreign currencies and exchange” with the Japanese yen.
Chinese financial execs urge regulators to be more involved in blockchain
Meanwhile in China, financial firms are calling regulators “to become involved” in the blockchain industry to prevent potential “illegal applications,” CoinDesk reported.
Dai Wenhua, of the China Securities Depository and Clearing Corporation (CSDC), was quoted saying: “We know The DAO has been hacked and Bitfinex has lost some of its bitcoins, it has shown the loopholes in bitcoin technology, and that means new technologies will bring new risk.”
Current bitcoin price and trade volume
The price of bitcoin breached the $600 mark on Monday, trading at $605 early Monday morning, with a trade volume of $149630.58.