Two of the world’s largest banking institutions have signed up for a blockchain-based trial.
In an industry that was once shunned by global banking giants, the tide has most definitely turned and blockchain options are being seriously considered by some of the largest companies in the world. Barclays and Citigroup have announced that they will partake in an app store trial for programmes that are based on blockchain technology.
The in-trial app called LedgerConnect was created in collaboration between an exchange processing firm CLS and tech firm IBM. It is expected to be made publicly available over the next few months with the help of blockchain vendors such as Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRish, SynSwap, and Persistent System.
Solving previously unsolvable problems
Over the last few years, various Wall Street institutions have tried out various different applications of blockchain technology in the hopes of solving some of the problems that have not been able to be solved in more traditional ways. Blockchain and distributed ledger technology provide a fast and secure way to exchange sensitive information which is a perfect fit for financial institutions which deal with large amounts of personal information every day.
The aim of LedgerConnect is to make it much easier for banks to opt into a project using the platform, as well as to encourage banks to use the same blockchain protocol as opposed to various incompatible ones.
Ram Komarraju, MD at CLS asked: “What is the point of having these people building the same infrastructure?”
Focussing on operations
He believes that banks should be focusing their energy on the operations of their firms instead of creating multiple new blockchain applications, all designed to fix the same problem.
LedgerConnect will offer a blockchain-based solution that will handle AML and KYC requirements, as well as issues around loan collateral management. The platform has been built on the IBM Blockchain Platform utilising Hyperledger Fabric Technology.
Whilst the recent news is a great step forward, the platform will still require regulatory approval from central banks, the government and the Federal Reserve Bank of New York- something that could take several months and involve jumping through a few hoops.
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