World’s leading investment banks eye bitcoin and blockchain technology

Bitcoin is increasingly gaining acceptance among participants of the financial markets all over the world. Since six years of its inception, the digital currency and the underlying technology has seen remarkable growth. Hundreds of start-ups have emerged that are receiving support from big banks and investment firms.

Wall Street giants such as Visa, Nasdaq and Citi Ventures have invested $30 million in Chain.Com, a San Francisco-based blockchain developer platform that works with financial institutions to develop ways to trade and transfer financial assets using blockchain technology. In yet another instance, Goldman Sachs supported Circle Internet Financial, a bitcoin financial services startup. 

Recently, JPMorgan Chase CEO Jamie Dimon, in his annual letter to shareholders said, “There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking... They are very good at reducing the “pain points” in that they can make loans in minutes, which might take banks weeks. We are going to work hard to make our services as seamless and competitive as theirs. And we also are completely comfortable with partnering where it makes sense.”

In June, reports surfaced that Barclays will be working with Bitcoin tech company Safello to explore blockchain technology and how it can be used to transform traditional banking practices.

Derek White, chief design and digital officer, Barclays, said: "At Barclays, we’re embracing the digital revolution, exploring innovations early on so that we can help to shape their development and co-create the future of financial services with these startups."

He is particularly excited about the blockchain technology, the software that both powers and regulates bitcoin. Barclays has set-up two bitcoin "labs" above old branches in Notting Hill and Old Street that are open to bitcoin and blockchain entrepreneurs, businesses, and coders.

White says: "It's a new technology, we know a little bit about it but we wanted to learn more from the creators of it. They could see our genuine interest in the technology and they could see we weren't looking to just sponsor, we were looking to shape."

These instances clearly demonstrate that world’s leading financial institutions are recognising the potential of bitcoin and the blockchain technology. It’s just a matter of time before this digital revolution completely transforms the traditional financial system and gains global acceptance.