Standard Chartered, a London-based multinational banking and financial services company has shown interest in the blockchain. A distributed ledger technology has the potential to become a model for a low-cost and transparent transaction infrastructure, suggests Anju Patwardhan, a Chief Innovation Officer at Standard Chartered.

Even though Bitcoin is unlikely to replace paper money, banks could benefit from implementation of a distributed ledger technology to improve security and integrity of the financial system. This could benefit the customers through lower trading prices and safer money transfers and remittances.

Anju Patwardhan believes that introduction of the blockchain technology will “make transactions more secure and traceable for customers, banks and regulators”. The blockchain database records all information about each transaction, including addresses and their balances, which can help with preventing financial crimes, such as money laundering.

Transaction transparency is not the only potential advantage of the blockchain, the Chief Innovation Officer continues. It can be useful in the trade finance which is usually a paper-intensive process, while the blockchain technology can help digitise and audit the records.

The world financial industry leaders are exploring the possible uses of the blockchain technology. As CoinFox reported earlier, in April 2015 the Bank of New York Mellon announced that it started experimenting with the blockchain. In the same month, UBS, a major Swiss bank announced the opening of a technology lab to explore the potential of the blockchain. In June, a group of Swiss investors decided to register a separate bitcoin bank in Switzerland. Some days later, LHV bank Estonia and a Colored Coins software company ChromaWay AB created a new blockchain-based platform and a wallet for P2P transactions in Euros. And recently, Barclays bank reached a Proof-of-Concept agreement with Bitcoin exchange Safello to create a bitcoin payment platform.

Daria Petushkova