Banks to invest $50 million in a blockchain settlement project

A group of banks is planning to invest approximately $50 million to design a digital cash system running on blockchain technology, Reuters writes. The technology will be used to settle financial transactions.

About a dozen financial institutions are investing in Fnality—the new entity which will run the project. The deal is still in the works. The project was first suggested by Swiss bank UBS Group AG and startup Clearmatics in 2015.  The "utility settlement coin" would be used for clearing and settlement in a bid to make the financial markets more efficient. The coin would be backed by cash assets and paired with a fiat currency.

UBS, Banco Santander, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group AG, Barclays PLC, HSBC Holdings Plc and Deutsche Bank AG have been involved in earlier phases of the project.