Banks have spent the last few years exploring how distributed ledger technology, or the blockchain, can help them cut costs or improve service.
To better understand how banks look at the issue we spoke to Hyder Jaffrey, Head of Strategic Investment and Fintech Innovation at UBS. In the interview he explains the utility settlement coin, a form of cryptocash a group of banks, including UBS, is working on.
Jaffrey argues that it helps to think of the world of digital currencies as a spectrum:
“At one end of it you have bitcoin, which is unregulated and operates outside of government control. At the other end you have central bank digital currencies – digital versions of existing currencies. The utility settlement coin is positioned right in the middle, with some of the benefits of bitcoin, such as the real time transfer of value (settlement), while taking on some characteristics of ‘real money’ issued by central banks. It is pegged to those fiat currencies and will always have the same value.”
You can read the full interview with Hyder Jaffrey here.
This is the third part in of our series on digital currencies, that we are publishing in collaboration with law firm Baker McKenzie.