Blockchain has proven yet again that it is the future of finance and economy as Barclays and Citigroup, along with nine other banking conglomerates, have signed up to fund projects for programs based on the technology.
Barclays and Citigroup actually signed up for the LedgerConnect app store trial. This app store was jointly announced by IBM as well as CLS. Fortune reports that in its launch in the coming months, its blockchain vendors-Baton Systems, Copp Clark, MPhasis, and Persistent System, among others, will be selected by the other banks.
Barclays and Citigroup have also been involved with funding startups in the past. These projects varied, but it all involved financial processes-the processes ranged from fixing issues involving transactions done instantly, to explaining and complying with regulations governing financial processes.
Bitcoinist, meanwhile, reveals the processes that the app LedgerConnect works with. It is a platform that connects banks with blockchain projects that are fundable and working. This project will connect banks to blockchain projects with the protection of the anti-money laundering "Know Your Customer" regulations. It is powered by the IBM Blockchain platform and is created with the Hyperledger Fabric technology.
It's not easy getting the project from the ground, however; nothing is simple when you're dealing in the blockchain. LedgerConnect still requires the approval of the oversight committee, which includes the Federal Reserve Bank of New York, among other banks. LedgerConnect is targeting next year as its release date, but when the bank approvals are involved, the exact release date can't be pinned down for sure.
There are also the intricate, complicated processes that banks have with their rules and regulations. The blockchain is a new and relatively untested technology. The processes of LedgerConnect require an overhaul of existing systems and regulations, which the involved banks are now currently doing. Then there's also the unpredictable nature of blockchain, which the banks have to navigate and protect against, in terms of security and the dangers of the web.
Keith Bear, vice president of financial markets at IBM, had it correct when he said that the challenge should be to "work together." He explained that the trick is to get to marry the old, antiquated systems of the banks with the fast and the limited nature of blockchain.
