It is estimated that potential savings up to €50 billion could be made through operational efficiencies, reduced human errors, and streamlined compliance thanks to DLTs. In this article, we highlight the latest applications of DLTs in the banking industry.
A large Japanese bank, Mizuho Bank, has partnered with over 60 other financial institutions to launch and use a “J-Coin” pegged to the Yen to serve as a means of payment for a base of 60 million customers. They claim significant ease of use, even compared with credit cards, and are expecting competition from other players trying to enter the sector, such as e-commerce platforms (Rakuten in the case of Japan). J-Coin launched on March 1st but has nothing to do with DLT; it is a central database managed coin.
Chinese mobile payment operators, the first of which was Alipay’s Ant Finance, are reported to be investing heavily in the technology.
One of the big headlines this quarter was JP Morgan Chase releasing a JPM dollar token, managed on Quorum, JP Morgan’s version of privacy enablement on Ethereum. The bank made much noise around the launch and has a good chance of actually succeeding in imposing its use, as it clears 80% of the S&P500, in addition to being the first mover.
The Italian Banking Association is testing a Corda-based tool to power settlement for the consortia members.
Société Générale has proposed an actively-managed fund investing in companies exposed to DLTs. A clear example of old finance trying to get involved in new finance!
Northern Trust is implementing smart-contracted logic to automate yield management on the already-tokenized assets it deals with.
Generali has declared that they are pursuing many projects; they believe that they need to try many things and try them with end users. The view is that most will fail, but the few that succeed will be scaled as fast as possible.
The Swiss-based Blockchain Insurance Industry Initiative (B3i) is expanding its investor base, and it has raised money to pursue its objectives. The “first product” of the consortium is intended to mitigate risk associated with reinsurance.
On a side note, we are curious and bemused that no insurtech has yet emerged proposing smart-contracted insurance products for the public… Maybe it is awaiting scalable platforms?
Check the full version of Blockchain Quarterly (Q1 2019) report for more Insights.