Nine of the worlds biggest banks, including Barclays and Goldman Sachs, are going to trial the use of Bitcoin technology in an effort to allow them to better track the use of digital currency.
Using the Blockchain system that logs how and where virtual coins are spent, the banks want to utilise the technology to prevent fraud and allow trading systems to become more transparent.
BBC News reports:
The project to test blockchain-like technology is being led by financial technology firm R3 which has signed nine banks up to the initiative.
The other seven are JP Morgan, State Street, UBS, Royal Bank of Scotland, Credit Suisse, BBVA and Commonwealth Bank of Australia.
Technical meetings with the banks had prompted discussion of how it could be used within banks’ trading arms, said David Rutter, head of R3 in an interview with Reuters.
For Bitcoin, the blockchain acts as a globally-distributed ledger that logs transactions. Everyone involved with the virtual currency contributes to the way the blockchain verifies each deal. The sheer number of people involved makes it very hard for one bitcoin user to get fraudulent deals verified and approved.