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Is Circle the first clear sign of banks embracing blockchain?
Earlier this month, it was announced that Barclays has become the first major British bank to partner with a digital currency firm
April 18, 2017: Earlier this month, it was announced that Barclays has become the first major British bank to partner with a digital currency firm
Ever since it was launched as open source code in 2009, there have been a raft of predictions that bitcoin would mean the end of traditional banking as we know it. While it is yet to reach those anticipated heights eight years on, there are however a number of signs that its popularity is on the rise.
In recent months the cryptocurrency has hit record values, while there have also been reports of developers asking to be paid in it after working on major projects. It has even broken into the entertainment and gaming world, with people now having the chance to spin away on online slots on dedicated bitcoin-only casino sites such as Bitcoin.io, which also offers sports betting and other traditional casino games.
So, with bitcoin seemingly being more popular than ever, what are the major traditional banks doing in response? Well, if recent developments are anything to go by, some are simply embracing the change.
Earlier this month, it was announced that Barclays has become the first major British bank to partner with a digital currency firm. The company in question is Circle, the organisation behind a social payment app which is based on the technology which powers bitcoin – blockchain. For the uninitiated, the concept of blockchain operates like a digital ledger and stores details of every bitcoin transaction made, meaning it prevents bitcoin from being spent more than once.
The technology also allows users to transfer funds without incurring fees, which is the reason why Circle uses it. In addition to this, Circle also allows people to add messages and even emojis to their money transfers when using the app. The partnership with Barclays means Circle now has the infrastructure to operate in the UK, while it has also become the first digital currency company to be granted an e-money licence from the Financial Conduct Authority.
While the news is clearly significant, it perhaps should not be too surprising. After all, the World Economic Forum has outlined before how blockchain technology could revolutionise a range of industries, with it having the ability to support any kind of transaction involving money or goods.
In addition, reports of the Barclays partnership have come weeks after the Canadian government confirmed it was working with private sector companies including SAP, IBM and PepsiCo to launch the Blockchain Research Institute in Toronto. The facility has been established to encourage a collaborative approach to creating blockchain-based economies across the world, with SAP’s chief innovation officer Juergen Mueller even describing the concept as “a transformative technology for businesses”.
It is quite clearly evident that interest in blockchain is sky high, but Barclays’ move to become the first UK bank to embrace the concept has put the financial institution ahead of the game when it comes to the banking sector.
While it is hard to bet against others following them into this area, can this development be seen as another step towards traditional banks embracing bitcoin? That may still be a long way off, but it is going to be fascinating to watch how new, innovative technologies continue to change the way both consumers and businesses interact with money.
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