Barclays PLC (ADR) (NYSE:BCS) and Citigroup Inc (NYSE:C) are part of nine financial institutions that are trying out a new app store. The app which is based on a distributed ledger technology (DLT) may signify the willingness of financial institutions to adopt the blockchain technology.
The app store known as LedgerConnect is a project developed by a partnership between tech giant IBM and CLS which is a foreign exchange processing firm. The platform which is based on IBM’s blockchain system is created using Hyperledger Fabric technology.
LedgerConnect will enable financial firms to efficiently access services that are based on DLT. Banks will be able to access services such as customer details, management of collateral, or even sanctions verification in a single platform. These services will safeguard banks against illegal activities such as money laundering.
LedgerConnect which was announced on Monday is set to be launched in the next few months. The platform feature’s some chosen services from some blockchain vendors. Banks will be in a position to choose vendors such as Calypso, Copp Clark, Baton Systems, IBM, Mphasis, OpenRisk, Persistent System, Participate, and SynSwap.
The system will simplify the process for banks to use blockchain technology on a single platform rather than each bank having to build its own system. Each bank having its own system may pose a challenge. Two banks may have incompatible systems thereby making transactions between themselves difficult. Thus, having a single platform helps the financial firms to focus entirely on the core business.
CLS’s managing director, Ram Komarraju stated that “Instead of building several new blockchain applications for the same problem, banks can then focus their energies on the own firm’s operations.”
Even though the application promises to simplify processes for banks, it still has to get approval from regulators. These include The Federal Reserve Bank of New York as well as various central banks.
Meanwhile, banks will be required to upgrade their internal systems so as to integrate their technology with LedgerConnect.