SEB is the only Nordic bank joining an international banking cooperation to explore the acclaimed block chain technology used in crypto currency Bitcoin. “The technology is considered as having great potential to revolutionise the global financial system and therefore it is valuable that we have the opportunity to participate,” says Rasmus Järborg, head of SEB’s Strategy Office.
Nine international investment banks, including Goldman Sachs, JP Morgan and Credit Suisse are supporting the initiative. They, along with tech company R3 are collaborating in what is called Distributed Ledger Group, DLG, to develop common standards for using the block chain technology. Distributed ledger is another name for block chain.
A block chain can be seen as a decentralised ledger where all parties are involved and verifies all transactions that take place. The technology has so far been most noted for its use by Bitcoin, but recently more and more people have become aware of possibilities for using the technology in all kinds of transactions.
The BlockChain Explained
The benefit of the block chain is that it does not require a middleman to verify each transaction, meaning that transactions can be performed faster, cheaper and easier than in today’s banking system.
SEB and 12 other banks joined the nine original members in mid-September.
“Using this new cooperation in DLG we get the opportunity to explore a technology that has the potential to deeply change the role of banks in the foreign exchange and securities trading markets, in custody and for international payments,” says Järborg.
Cooperation within DLG begins immediately. SEB will have a role in DLG’s steering committee, as well as experts in the three work streams architecture, technology and legal/regulatory, and commercial applications.