The globally renowned news agency the Reuters reports that IBM or International Business Machines Corp is considering adopting the underlying technology behind Bitcoin, known as the “Blockchain,” to create a digital cash and payment system for major currencies. Though the report does not cite the source, it claims that the person is indeed a trusted source.
The news agency says that the objective is to allow people to transfer cash or make payments instantaneously using this technology without a bank or clearing party involved, saving on transaction costs, the person said. Nonetheless, the transactions would be in an open ledger of a specific country’s currency such as the dollar or euro.
Those who are familiar with Bitcoin know that the Blockchain, a ledger, or list, of all of a digital currency’s transactions, is viewed as Bitcoin’s main technological innovation. This technology allows users to make payments anonymously, instantly, and without government regulation. This is as an asset for payment makers; however, an issue for the government agencies.
In Blockchain technology, information is not stored on a separate server and controlled by an individual, company, or bank, the ledger is open and accessible to all participants in the Bitcoin network. According to the new report the source says that the proposed digital currency system would work in a similar way.
When large numbers of computer technology companies are doing business with Bitcoin, the attempt by IBM is another step towards embracing the technology behind Bitcoin. It is one of a number of tech companies looking to expand the use of the Blockchain technology beyond Bitcoin which was launched six years ago.
Even the Bank of England Impressed with Blockchain technology
The people associated with the plan claim that IBM has been in informal discussions about a Blockchain-tied cash system with a number of central banks, including the U.S. Federal Reserve. Nonetheless, if central banks approve the concept, IBM will build the secure and scalable infrastructure for the project.
The news agency claims that IBM media relations office did not respond to its emails about this story and the Fed declined to comment though. However, there are signs that central banks are already thinking about the innovations that could arise through digital currency systems.
For instance, the Bank of England, in a report in September 2014, described the Blockchain’s open ledger as a “significant innovation” that could transform the financial system more generally.
To contact the reporter of this story: Deepak Tiwari at email@example.com