22 banks join together to define the future of blockchain
BNY Mellon recently joined a consortium of 22 major banks looking to define the future of blockchain technology. This consortium, known as Distributed Ledger Group (DLG), was started by financial innovation firm R3 and includes leading financial institutions globally.
Blockchain is a rapidly evolving technology that has garnered significant interest amongst financial institutions for its potential to evolve traditional systems. Best known as the backbone of the Bitcoin cryotocurrency, it is a distributed ledger that can enable participants to transact with each other through a single distributed mechanism.
“We believe, and many others would agree, that distributed ledgers like the blockchain have tremendous potential for our industry,” said Suresh Kumar, CIO, BNY Mellon. “However, the ideal application has yet to be identified. Blockchain technology’s current state of development actually has parallels to the start of the Internet. The Internet as we know it didn’t just happen when the infrastructure was put in place. It took someone to imagine the game-changing applications — lead by user-friendly email and search — that turned a limited research platform into a disruptor of the way the world communicates.”
For the past year, BNY Mellon has been conducting a significant amount of research into blockchain, with the investigations being carried out by business and technology groups working together in close partnership. In order to advance this research, collaboration with other institutions is critical.
“We are at a place in our work with blockchain where constructive collaboration with external research partners is very valuable,” said Kumar. “In order to advance our industry and be disruptors — instead of the disrupted — we need to embrace Silicon Valley-style philosophies on collaboration and knowledge-sharing with our peers. This consortium brings us a step closer to that.”
The consortium will collaborate on research, experimentation, design, and engineering to help advance state-of-the-art enterprise-scale shared ledger solutions to meet banking requirements for security, reliability, performance, scalability, and audit. The group will work within a collaborative lab environment or “sandbox” to test and validate distributed ledger prototypes and protocols.
The participation in this group was a collaborative effort between BNY Mellon’s Technology, Treasury Services and the Markets Group divisions. Mike Curran, head of the FX business in the Markets Group noted, “We are very excited to work with our partners in Technology and Treasury Services to participate in DLG and support innovation at BNY Mellon. These areas, and any others that may leverage the new technology, will continue to work together to define how blockchain will be used at BNY Mellon.”