Bitcoin might still be seen as a gamble to traditional banks, but the core functionality of the anonymous payments system is something most banks want to integrate into everyday banking, due to the massive potential savings.
Barclays is the latest bank in the UK to start working on Bitcoin blockchain for everyday banking. Blockchain is a software algorithm allowing the system to keep tabs on payments, without having a centralised regulating authority.
This should, in theory, save the banking industry billions in time and cost. Things like international payments still cost banks, and the cost is normally tagged onto customer’s payments, alongside it taking days if not weeks to finish the transaction.
Bitcoin removes these barriers with blockchain, and Spanish bank Santander is already claiming up to £12 billion in savings could be made by switching to the technology.
Barclays is working with Swedish startup Safello, to explore how to implement blockchain in everyday banking. Ideally, Barclays wants to keep the same user experience, but have international and first-time payments less regulated by the government and other banking authorities.
This will take time, since the UK government is not too pleased with Bitcoin as a concept. Several other European countries have went against Bitcoin’s legitimacy, but the backbone technology powering the Internet currency might be worth looking into.
Either way, most analysts project five to ten years before major banks adopt these Bitcoin technologies, given the amount of regulation and the slow pace of the banking world. Companies in China, like Tencent and Alibaba’s own private banking services, might adopt these payments systems before the West gets involved.