BNY Mellon, Deutsche Bank, ICAP (via Euclid Opportunities) and Santander join UBS and Clearmatics to advance the Utility Settlement Coin (USC) concept, and plan tests in a real-market environment.
USC is a digital cash model aimed at facilitating payment and settlement for institutional financial markets. The group will collectively build on the successful outcome of initial explorations of the Utility Settlement Coin concept, performed by UBS and Clearmatics.
The focus of the work will consist of financial structuring of the USC and wider market structure implications;as well as market integration points for a fully operational utility settlement coin for future use by institutions.Additionally, Clearmatics is tasked with delivering early releases of the technology platform to underpin the concept. Active dialogue with central banks and regulators will continue to ensure a regulation compliant,robust and efficient structure within which the USC can be deployed.
“Digital cash is a core component of a future financial market fabric based on blockchain technologies,” said Hyder Jaffrey, Head of Strategic Investment & FinTech Innovation at UBS Investment Bank. “There are several digital cash models being explored across the Street. The Utility Settlement Coin is focussed on facilitating a new model for digital central bank cash.”
The USC concept will be developed through a series of short iterative phases and platform deployments. At each stage the aim is to increase the number of market participants, broadening engagement, connectivity and network effect.
“Cash is a leg to almost every trade, so this project is key to unlocking the benefits that the industry can gain from distributed automation technology in clearing, settlement and collateral management.” said, Robert Sams, Founder and CEO of Clearmatics
“We believe digital cash will be integral to next generation market infrastructure and will deliver significant benefits to our clients.” said Michael McFadgen, Managing Director, Euclid Opportunities.
“As today’s settlement and clearing is a process involving many institutions, it’s vital that we collaborate with our peers to develop viable alternatives to current models, creating new digital capabilities for the financial services industry.”, added Paul Maley, Managing Director, Institutional Client Group, Deutsche Bank.
“Recent discussion of digital currencies by central banks and regulators has confirmed their potential significance. The USC is an essential step towards a future financial market on distributed ledger technologies,” commented Julio Faura, Head of R&D at Santander.
“The USC initiative provides an exciting opportunity to work closely with other industry thought leaders and the regulatory community to explore the possibilities of this technology.” said Saket Sharma, Head of Treasury Services Technology at BNY Mellon.