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(Bloomberg) -- Credit Suisse Group AG and Barclays Plc are joining a UBS Group AG initiative to create a new type of digital money to settle financial transactions over blockchain.
Canadian Imperial Bank of Commerce, HSBC Holdings Plc, Mitsubishi UFJ Financial Group and State Street Corp. will also take part in the Utility Settlement Coin project, according to a memo from UBS seen by Bloomberg. The members will now focus on deepening ties with regulators and central banks.
The value of a bitcoin, the best-known digital currency, soared past $4,000 for the first time in August on optimism that faster transaction times will hasten the spread of the crypto-currency. While some lesser-known competitors are struggling now, some have seen even bigger gains, such as a more than 4,000 percent increase for ethereum. Banks are increasingly working with startups and venture capitalists are also expanding their investments.
“The USC project aims to provide a regulated and near-term digital cash that provides the digital benefits of cryptocurrencies,” the memo said.
The Utility Settlement Coin project began as a joint enterprise between UBS and Clearmatics Technologies in late 2015. Since then, it has added Banco Santander SA, Bank of New York Mellon Corp., Deutsche Bank AG and NEX Group Plc.
“There will be multiple USCs, one for each traded currency,” UBS said in the memo. “Each USC will be paired one-to-one with its domestic currency and is 100 percent collateral-backed with its respective cash, held at the domestic central bank.”
The Financial Times reported the expansion of the project earlier.
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