A group of large banks is planning to launch its own digital currency

Here is the news for you: Swiss bank UBS and 13 other financial companies, including major banks in the United States, Europe and Japan, created a new company that will lead the development of digital currency, the Wall Street Journal reports. This project can become one of the most ambitious and most anticipated blockchain projects in the world - provided that it is actually on the blockchain. Companies also collectively invested $ 63 million in this venture.

Why do banks need a blockchain?

Not so much is known about the token.technical details. Presumably, the project will include the creation of a digital currency based on the blockchain. The WSJ describes the token as "simultaneously a payment device and instant messenger that carries all the information necessary to complete a transaction." It will be backed up by a fiat currency controlled by banks. Romaios Ram, executive director of the new company, which was named Fnality International, said that, in his opinion, the currency will be “fully operational” for a year.

Companies that participate in the project work withClearmatics blockchain-startup and say that the blockchain will create a coin for payments for utilities. However, how it will work in reality, while no one knows. The project was conceived back in 2015, but in 2017 the Financial Times reported that “this is actually not so much a blockchain project as a market infrastructure project”. In addition, many argue that the blockchain project does not make sense if it is controlled centrally, as in the case of banking supervision.

In short, banks create their own digital currency, but how it will differ from the virtual currency, which even now "lies in the accounts" is not clear.

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