Barclays becomes first UK high street bank to explore the blockchain

Barclays is testing how the blockchain, the technology that underpins virtual currency bitcoin, could transform banking.

Barclays: exploring how bitcoin technologies could transform finance
Barclays: exploring how bitcoin technologies could transform finance

The bank has signed a proof of concept with Safello, a Swedish bitcoin exchange that allows registered users to buy and sell bitcoins, fast.

A Barclays spokeswoman refused to reveal any detail at this stage, saying the two were in confidential talks. But she added that the bank was making a "statement of intent" and said Barclays was generally interested in exploring what bitcoin technologies could do for financial services.

Safello is one of 10 companies signed up to the bank’s start-up accelerator, with Barclays considering partnerships with seven of those 10.

Another bitcoin firm, Atlas Card, is also on the programme, offering a bitcoin debit card aimed at consumers in emerging economies.

What is the blockchain?

A number of large banks are experimenting with  the blockchain, which is seen as the main technological innovation behind bitcoin.

Santander’s Innoventures venture capital arm claimed the tech could save banks up to $20bn a year, while Nasdaq in the US is trialling the blockchain on its Nasdaq Private Market, a fledgling market launched in 2014 to handle pre-IPO trading. But what it is?

The short explanation is that it is a long, long list of every bitcoin transaction that has ever taken place. It is available to every ‘node’, or computer, on the bitcoin network and lists the sender, receiver and other transaction details, while also keeping the information totally anonymous.

The most interesting aspect of blockchain is group verification, meaning no one has to rely on a single, fallible party to verify a transaction. It’s also private, meaning transactions can’t be traced back to identifiable individuals – hence bitcoin’s reputation as the criminal currency of choice.

Banking isn’t the only industry exploring the potential of blockchain. British entrepreneur Jessi Baker founded Provenance to help retailers make supply chain information more transparent. The wine industry is also exploring blockchain as a way of reducing fraud in fine wine sales.


Recommended