ICAP, banks, investors join UBS and Celarmatics to utilize blockchain-based settlement concept

ICAP, banks, investors join UBS and Celarmatics to utilize blockchain-based settlement concept

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ICAP, a leading markets operator, announced it has joined the UBS financial services company and the enterprise technology Clearmatics in the further development of the blockchain-based Utility Settlement Coin (USC) concept.

The project, which recently passed successful testing, is also joined by the financial services company BNY Mellon, Deutsche Bank and Banco Santander. It focuses on the real-market testing and the utilization of a single settlement digital currency for future use by large financial institutions. The participants in the project will also seek active dialogue with central banks and regulators in order to ensure compliance and safe structure for the deployment of the USC.

The USC is an asset-backed digital cash instrument utilizing the distributed ledger technology of the blockchain and its intended use is within the global institutional financial markets. The USC has a version for each of the major global currencies such as USD EUR, GBP, CHF and is fully backed by assets held in a central bank. Hence, spending a USC will mean spending its equivalent in the underlying fiat currency.

The USC project was launched by Clearmatics last September. It was initially incubated as part of the UBS initiative for blockchain research and experimentation – Crypto 2.0 Pathfinder.

“Digital cash is a core component of a future financial market fabric based on blockchain technologies,” said Hyder Jaffrey, Head of Strategic Investment & FinTech Innovation at UBS Investment Bank. “There are several digital cash models being explored across the Street. The Utility Settlement Coin is focused on facilitating a new model for digital central bank cash.”

ICAP is a leading markets operator and provider of information and risk mitigation services. It acts as a wholesale broker on the forex, commodities, credit, interest rates, and emerging markets.

ICAP will participate in the project through its early-stage fintech investment business Euclid Opportunities. It is part of ICAP’s post trade division, which also comprises TriOptima, Traiana, RESET and ICAP Information Services, which recently launched the EBS CNH Benchmark – the first fully electronic trade-backed reference rate for the offshore Chinese renminbi (CNH) market.

“We believe digital cash will be integral to next generation market infrastructure and will deliver significant benefits to our clients.” said Michael McFadgen, Managing Director, Euclid Opportunities.

Another participant in the project, the bank Santander, is no stranger to the implementation of the blockchain technology, either. In June this year its UK branch launch blockchain payments tests, using the technology of the fintech company Ripple.

Last week a group of leading Japanese banks announced it is planning to form a consortium with SBI Ripple Asia and jointly build a blockchain-based system for 24-hour fund transfers services, similarly to the USC.

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