Bank-Backed Coins: Is it game over for others?

Bank-Backed Coins: Is it game over for others?

Some of the world’s biggest banks continuously endeavored to create and release a new digital currency. They hope the new coin will be able to gather enough momentum to blow away rival cryptocurrencies from the market.

Six biggest banks in the world namely; HSBC, Canadian Imperial Bank of Commerce, State Street, MUFG, Credit Suisse and Barclays, have joined hands in a project aimed to generate a new digital currency that will use blockchain. The Financial Times revealed that UBS, Swiss banking giant, launched project “utility settlement coin” recently.

Other four retail banks like BNY Mellon, Banco Santander, NEX and Deutsche Bank have already agreed to utilize these coins for various transactions. Developers of the coin hope that as it settles transactions, it will increase financial markets efficiency.

The digital coin’s Competitive ability

Talks are in motion with Central banks and regulators about the creation and usability of the digital currency rather than relying on other available cryptocurrencies like Ethereum and Bitcoin. The coins will cut on the capital, costs and time needed for post-trade settlements as Central banks will easily convert it to cash.

Luigi Wewege, a financial consultant, states that the new coin can significantly affect the cryptocurrency market. When banks decide to utilize the ‘new utility settlement coin’ may squeeze out less competitive digital currencies.

After the coin developed is put on a public offer, it will make transacting on these coins similar to transacting with other paired real currency. It might be game over for smaller cryptocurrency operations