Barclays to introduce Bitcoin technology in UK finance
Tue 23 Jun 2015
British banking group Barclays is set to become one of the first multinational finance bodies to introduce bitcoin technology.
The bank has reportedly signed a deal with Safello – a Swedish startup incubated in the Barclay’s fintech accelerator programme in London. Safello is an online Bitcoin exchange platform, which allows users to buy and sell Bitcoin using traditional currency. The Stockholm-based company already counts over 20,000 registered users in Europe.
The deal will involve a close working relationship creating “proof of concepts”, testing traditional banking methods in blockchain to prove their efficacy. The blockchain trials will be among the world’s first in a financial services environment.
“At Barclays, we’re embracing the digital revolution, exploring innovations early on so that we can help to shape their development and co-create the future of financial services,” said Derek White, chief design and digital officer at Barclays.
Many industry experts believe that blockchain holds the potential to significantly advance financial transactions, as it presents a faster and more cost-efficient alternative to legacy systems currently used for banking.
A recent Santander report [PDF] claimed that blockchain technologies could reduce bank infrastructure costs by as much as $20bn (approx. £13bn) per year.
Other financial institutions are undoubtedly interested in this potential. UBS has established a blockchain ‘lab’ in Canary Wharf, while Santander is also looking into the technology. A spokesperson for the Spanish bank revealed that the group had already identified at least 20 use cases for blockchain technology.
However concerns around security and accountability as well as years-long regulatory procedures for banks mean that the technology will not be adopted anytime soon. Bitpay CEO Stephen Pair suggested that it will be at least five years before any bank introduces even a thin version of blockchain.