Big banks signal end of Bitcoin with ‘new form of digital cash’

A new coin is coming, and this time, it may lead to the death of legacy Bitcoin.

Six global banks—Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, Japan’s Mitsubishi UFJ (MUFJ), and State Street—have joined together to launch a new form of digital currency called the “utility settlement coin.”

The coin was created by Swiss global financial services company UBS based on a Clearmatics Technologies product “to make financial markets more efficient,” according to the Financial Times. USC’s goal is to enable financial groups to pay each other or buy securities using digital coins that can be directly converted into cash at central banks, thus removing the need for traditional money transfers. The coins are stored on the blockchain and can be converted into different currencies.

Hyder Jaffrey, head of strategic investment and fintech innovation at UBS, told FT they are in talks with central banks and regulators, a process they expect to continue “over the next 12 months with the aim of a limited ‘go live’ at the back end of 2018.”

USC’s first use case will be with banks looking to pay each other in different currencies, Jaffrey said. Then, the coins could be used to settle securities trades, although the securities will have to be transferred to the blockchain first.

If all goes to plan, banks will no longer have a need to go fiat anymore. Or even legacy Bitcoin and other altcoins for that matter, said Dr. Craig Wright, chief scientist of blockchain technology and research company nChain.

“USC will kill the BTC branch of Bitcoin as there is now no reason for it to exist,” Wright said.

It’s not news that banking giants are scrambling to either adapt to or kill off legacy Bitcoin, which will soon put an end to traditional banking. There are still plenty of issues surrounding cryptocurrencies, but one thing is for sure: Bitcoin, and now Bitcoin Cash, will render traditional banks irrelevant because it will give the financial system back to the people.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.