[2016-08-25] Big Banks To Make Their Own Digital Currency: Why That's Worrying

[elyas772]

According to an article on bitcoin.com, four major banks and a broker are joining forces to launch their own blockchain-based digital currency, provisionally called “utility settlement coin.” UBS, Deutsche Bank, Banco Santander and BNY Mellon are joined in the project by the broker ICAP.

The idea of adding a unique currency to their blockchain creates a problem recognized by many people, including me: the appropriation of the blockchain by major financial institutions.

As Hyder Jaffrey, UBS’s head of Fintech innovation puts it in a quote in the bitcoin.com article, “You need a form of digital cash on the distributed ledger in order to get maximum benefit from these technologies. What that allows us to do is to take away the time these processes take, such as waiting for payment to arrive. That frees up capital trapped during the process.”

http://www.nasdaq.com/article/big-banks-to-make-their-own-digital-currency-why-thats-worrying-cm669933

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1715195740

[Kprawn]

These digital currencies pose a huge threat to people's financial privacy, because it will be a permissioned technology. They will strictly adhere to KYC/AML regulations and everyone using this technology

will have it's privacy obliterated. You might be better off staying with cash, if you considering using these technologies. It's just another form of payment method that can be farmed for information and

be tracked by these banks. It's sick that these companies are using Blockchain based technologies to spy on people's finances. 

[TraderTimm]

This was widely anticipated.

Banks have "not invented here" syndrome, which prevents them from bringing in something outside of the "house" into internal operations. What they are actually snubbing is the worldwide hashpower of Bitcoin, which is their first mistake. Their second mistake will come in the form of lack of mining resources. I doubt their little utility coin will be supported by corporate-sponsored legions of miners. No, they'll just put up what they think is "enough" to secure their blockchain and leave it at that.

Until the first virtual server breach, or network hack. Then some enterprising soul can show them what a 51% attack is and totally screw their coin - or better yet - redirect resources so they "mine" the utility coin and end up transferring a large chunk of value to some bank account they own.

None of this is going to result in "BankCorp" coin being anything but an expensive experiment in ego-stuffing. Let them learn the hard way... in fact, I'm betting on it.