Finance and tech heavyweights join forces as blockchain initiative grows
LONDON Dec 17 (Reuters) - Big names from the worlds of finance and technology such as Deutsche Boerse, JP Morgan, Cisco and IBM have come together to work on an open-source framework for using the "blockchain" technology that underpins the web-based cryptocurrency bitcoin.
The new technology works as a huge, decentralised ledger of every bitcoin transaction ever made, which is verified and shared by a global network of computers and is therefore virtually tamper-proof.
It has been drawing investment from banks and other financial players, who reckon it could save them money by making their operations faster, more efficient and more transparent.
The data that can be secured by the blockchain is not restricted to bitcoin transactions. Any two parties could use it to exchange other information, including stock deals, legal contracts and property records, within minutes and with no need for a central authority to verify it.
The new project will be run by the not-for-profit Linux Foundation, and will focus on building industry-specific applications, platforms and hardware systems to support business transactions.
The initiative will include Digital Asset Holdings, the blockchain start-up run by former JP Morgan executive Blythe Masters, who has become something of an ambassador for the nascent technology.
The initiative will also work with the blockchain consortium of banks run by financial technology firm R3, which on Thursday said it had added another 12 banks, including Santander and Nomura, and would soon include some of the world's biggest fund managers.
The Bank for International Settlements, the central bank for central bankers, said in a report last month that blockchain technology could reduce the role of intermediaries such as banks or other financial players.
But a senior executive at German exchange operator Deutsche Boerse, one member of the new Linux initiative, told Reuters in a recent interview that it does not see itself being made irrelevant by the new technology. Continued...