Bitcoin may have risen over 35 percent so far this year, but it’s the underlying technology behind the cryptocurrency that is exciting the world’s major banks.
Called the blockchain, it has been heralded as a potentially disruptive force in finance by major institutions, which claim that bitcoin is just the “opening act” in something bigger.
Blockchain works like a huge, decentralized ledger for the digital currency bitcoin which records every transaction and stores this information on a global network so it cannot be tampered with. It’s this technology that banks feel can be utilized in areas from remittances to securities exchanges.
Currently, a consortium of more than 25 banks, led by fintech (financial technology) company R3, is developing a framework for applying blockchain technology to markets.