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Big banks plan to coin new digital currency

Four of the world's biggest banks have teamed up to develop a new form of digital cash that they believe will become an industry standard to clear and settle financial trades over blockchain, the technology underpinning bitcoin.

UBS, the Swiss bank, pioneered the "utility settlement coin" and has now joined forces with Deutsche Bank, Santander and BNY Mellon — as well as the broker ICAP — to pitch the idea to central banks, aiming for its first commercial launch by early 2018.

The move, to be announced on Wednesday, is one of the most concrete examples of banks co-operating on a specific blockchain technology to harness the power of decentralised computer networks and improve the efficiency of financial market plumbing.

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"Today trading between banks and institutions is difficult, time-consuming and costly, which is why we all have big back offices," said Julio Faura, head of R&D and innovation at Santander. "This is about streamlining it and making it more efficient."

Blockchain technology is a complex set of...


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