Six leading financial institutions have joined UBS’ project that involves developing a blockchain-based digital currency, Financial Times reported.

Last August, UBS announced that it was joining forces with Deutsche Bank, Santander and BNY Mellon, as well as the fintech company Clearmatics, to promote its “Utility Settlement Coin” (USC). It describes USC as:

“A blockchain-based digital currency that financial institutions could use to directly transact securities with each other, bypassing the traditional settlement process. Initially developed by Clearmatics in conjunction with UBS, the USC is intended to be directly convertible into central bank cash. With it, banks could significantly reduce the time and cost of post-trade settlement and clearing.”

According to FT, Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have now joined the USC project. The announcement comes at a time when the project is entering a new phase of development, which would see the members trying to deepen discussions with central banks and to work on ramping up its data privacy and cyber security protections.

“We have been in discussions with central banks and regulators and we will continue that over the next 12 months with the aim of a limited ‘go live’ at the back end of 2018”, Hyder Jaffrey, head of strategic investment and fintech innovation at UBS, said (as quoted by FT). “This isn’t going to come in with a big bang, it is going to come in with a series of developments over time.”

UBS and Clearmatics launched the USC concept in September 2015 to validate the potential benefits of the coin for capital efficiency, settlement, and systemic risk reduction in global financial markets. The project was initially incubated as part of the UBS Crypto 2.0 Pathfinder Program, UBS's initiative for research and experimentation on blockchain.

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