The World’s Largest Banks Team Up to Understand Bitcoin

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The world of cryptocurrency was rocked this week as nine of the world’s largest investment banks announced a new partnership with New York-based tech startup R3CEV in an attempt to develop standards for using the “blockchain” technology behind bitcoin.

The block chain is essentially the ledger for all bitcoin transactions. More specifically, it is the technology backbone of cryptocurrency. Miners use computers to connect to the block chain and solve complex mathematical problems that secure the network. The miners are rewarded with bitcoins for securely processing transactions and recording them into the block chain.

The banks behind the partnership are JP Morgan, Commonwealth Bank of Australia, BBVA, Barclays, Goldman Sachs, UBS, Royal Bank of Scotland, Credit Suisse and State Street. These banks are interested in understanding how to use the blockchain as a way of instantly updating payment ledgers and transferring money without relying on the trust of a central authority.

“If you’re looking to introduce applications with distributed ledger technologies to improve the financial markets, you can’t have each participant working to a different pattern,” said Christopher Murphy, global co-head of FX, rates and credit at UBS told The Financial Times. “What R3 … [is] doing is bringing a consensus which could establish common standards.”

The banks are investing several million dollars into R3. The group will soon decide whether to use the Bitcoin-type blockchain or another one. What ever decision the R3/Banking cartel decides upon it is sure to create ripples through the Bitcoin community, especially the crowd that remains skeptical of banking institutions involvement in the world of crypto-currency.

The new partnership follows on the heels of a $30 million dollar investment into Bitcoin’s blockchain technology from major credit card companies.

On September 10, Coinivore’s Jeff Paul reported:

Bitcoin has proven to be a far more efficient payment system than aging credit card technology. Major credit card companies have noticed and are taking action.

Visa and Capital One are now betting on blockchain technology for credit cards to the tune of $30 million.

Nasdaq’s blockchain technology partner Chain just announced a $30-million investment round, primarily from credit card giants Visa, Citi Ventures and Capital One.

With the world’s largest banks and credit firms investing in Bitcoin and the blockchain it appears that the growth of cryptocurrency will only continue.

These latest announcements are sure to create ripples through the Bitcoin community, especially the crowd that remains skeptical of banking institutions involvement in the world of cryptocurrency.

Derrick Broze is a liberty journalist and bitcoin user. He writes for Coinivore and many other publications. Follow him on Contently.