Global investment bank UBS is throwing its resources behind the blockchain’s transformative potential, investigating a range of applications such as smart bonds, cross border payment transactions on the distributed ledger and a digital representation of physical currency.
In 2015 the bank opened an innovation lab designed to explore how the blockchain could be used by the financial services sector and how it would disrupt traditional banking models. Now its research will turn into reality. UBS group chief operating officer Axel Lehmann told The Australian Financial Review the blockchain could be “the next internet” in terms of its potential, but there were still questions to be answered.
“We don’t want to close our eyes and sit on top of the development … but there are still a lot of technical, security and legal questions that need to be addressed before a public blockchain can be realised,” he said.
Blockchain technology allows a list of transactions to be shared among a number of computers, rather than on a central server, and the secure ledger updates in almost real-time across all the systems in the network. These networks can be either public or private. Mr Lehmann’s comments come after UBS released a white paper into how the blockchain could transform the sector, suggesting possibly creations like smart wallets that are connected to the blockchain and let people program their own portfolio managers.