Bank of New York Mellon Corp (NYSE:BK), Deutsche Bank AG (USA) (NYSE:DB), ICAP plc (LON:IAP) and British bank Santander UK plc join UBS and Clearmatics to advance the Utility Settlement Coin concept, and plan tests in a real-market environment.
USC is a digital cash model aimed at facilitating payment and settlement for institutional financial markets. The group will collectively build on the successful outcome of initial explorations of the Utility Settlement Coin (USC) concept, performed by UBS and Clearmatics.
The focus of the work will consist of financial structuring of the USC and wider market structure implications; as well as market integration points for a fully operational utility settlement coin for future use by institutions. Additionally, Clearmatics is tasked with delivering early releases of the technology platform to underpin the concept. Active dialogue with central banks and regulators will continue to ensure a regulation compliant,robust and efficient structure within which the USC can be deployed.
Hyder Jaffrey, Head of Strategic Investment & FinTech Innovation at UBS Investment Bankр said:
Digital cash is a core component of a future financial market fabric based on blockchain technologies. There are several digital cash models being explored across the Street. The Utility Settlement Coin is focussed on facilitating a new model for digital central bank cash.”
The USC concept will be developed through a series of short iterative phases and platform deployments. At each stage the aim is to increase the number of market participants, broadening engagement, connectivity and network effect.
Robert Sams, Founder and CEO of Clearmatics Technologies LTD, commented:
Cash is a leg to almost every trade, so this project is key to unlocking the benefits that the industry can gain from distributed automation technology in clearing, settlement and collateral management.”
Michael McFadgen, Managing Director, Euclid Opportunities, said:
We believe digital cash will be integral to next generation market infrastructure and will deliver significant benefits to our clients.”
Paul Maley, Managing Director, Institutional Client Group, Deutsche Bank, added:
As today’s settlement and clearing is a process involving many institutions, it’s vital that we collaborate with our peers to develop viable alternatives to current models, creating new digital capabilities for the financial services industry.”