November 23, 2015
In September, we published an article (with an infographic) showing the announcements by different FIs and their partners (if any), along with the potential use cases of blockchain that they are exploring. It got some great feedback and thousands of shares; thank you for that. The article covered the banks and other FIs who have shown intent on blockchain from the period of 2013 to June 2015. In the following article, we have extended the timeline further & have tried to cover the innovations and practices implemented by FIs in blockchain technology from July 2015 to the present day.
1. Bank of America:
The US Patent & Trademark Office website revealed (September 2015) that Bank of America had filed a patent on a System and Method for Wire Transfers Using Cryptocurrency. The patent deals with using a system that would decide on one optimal method for completing a wire transfer, in other words: remittance of money. The system in this process would use multiple cryptocurrency exchanges, wherein a funds transfer initiated by one customer could be exchanged via one cryptocurrency exchange, and at the receiving end, they could be re-converted to currency using another cryptocurrency exchange. The different cryptocurrency exchanges mentioned include OKCoin, BitStamp, BTCChina, Cryptsy, CoinMarket and Justcoin. However, they also mention that this list is not exhaustive.
At the Money 20/20 event in Las Vegas, NASDAQ unveiled its new blockchain-based platform which facilitates share transfers and sales on its private market. NASDAQ Linq is a digital ledger technology that leverages blockchain to facilitate the issuance, cataloging and recording of transfers of shares of privately-held companies on the NASDAQ Private Market. It will complement ExactEquity, NASDAQ Private Market’s cloud-based capitalization table management and stock plan administration solution. NASDAQ Linq clients will be provided with a comprehensive, historical record of issuance and transfer of their securities, offering increased auditability, issuance governance and transfer of ownership capabilities. The company also announced the initial roster of private company clients like Chain.com, ChangeTip, PeerNova and TangoMe.
The firm invested in Chain.com (September 2015), a blockchain infrastructure provider for FIs and enterprises. NASDAQ chose Chain to run a pilot around blockchain technology on the NASDAQ Private Market. The stock exchange firm is also looking to expand its blockchain ambitions beyond the US, planning securities-focused applications in Estonia.
Investor in Chain.com., a blockchain infrastructure provider for FIs and enterprises. Chain helps companies build financial products around blockchain technology with its bitcoin data API. (September 2015)
At Money 20/20, Visa showcased a prototype connected automobile with an interesting app built into its dashboard. A collaboration between Visa and DocuSign, it uses the bitcoin blockchain to record several types of contract information. (October 2015)
Visa Europe announced (November 2015) its collaboration with Epiphyte, a provider of blockchain-based software-as-a-solution (SaaS) for immediate financial transactions. Visa Europe Collab and Epiphyte, a recent graduate from San Mateo incubator Boost VC will be working on a proof-of-concept to use bitcoin and blockchain capabilities to make remittance services more efficient and easier to use.
The bank is seeking to launch a loyalty program (November 2015) that uses the technology sometime in 2016. According to American Banker, Royal Bank of Canada (RBC) President and CEO Dave McKay suggested that RBC was currently looking for low-risk ways to introduce its customers to the technology and that a loyalty program was the best fit at this time.
Nine banks collaborated (mid-September) to develop common standards of blockchain technology by backing a blockchain startup called R3CEV. Thirteen more banks joined by the end of September. In October, three more banks joined the R3CEV collaboration, taking the total count to 25; in November, five more banks joined hands to make the total number of banks in the R3CEV collaboration to 30. Here are the 30 banks that are collaborating: Goldman Sachs, JP Morgan, Credit Suisse, Barclays, Commonwealth Bank of Australia, State Street, RBS, BBVA, UBS, BNY Mellon, Mitsubishi UFJ Financial Group, Citigroup, Commerzbank, National Australia Bank, Royal Bank of Canada, SEB, Societe Generale, Toronto-Dominion Bank, Bank of America, Deutsche Bank, Morgan Stanley, HSBC, BNP Paribas, Canadian Imperial Bank of Commerce, ING Bank, Macquarie Bank, Wells Fargo & Co, Mizuho Bank, Nordea Bank, and UniCredit.
Banks around the world are embracing the principles of open innovation to augment their product development programs. Recently, we saw a number of banks/FIs sponsoring the blockchain hackathons as it is a great way to analyze and embrace the payment ecosystem with the opportunistic side of the new technology. Here are the various events and hackathons sponsored/to be sponsored by FIs: