Pub. 7 2016 Issue 4

Winter 2016 13 West Virginia Banker The Financial Industry and Governments are Embracing Digital Currencies and Blockchain Technology By Nicholas P. Mooney II,Spilman, Thomas & Battle I n last quarter’s issue, we discussed the rise of digital cur- rencies and the blockchain, or distributed ledger, tech- nology that supports them. We now turn our focus to how the financial industry and governments have embraced this technology and are working to adapt it to traditional banking services and applications as far ranging as recording property transfers and safeguarding nuclear missiles. The Financial Industry Races to Adopt Blockchain Technology Far from ignoring what is happening in the peer-to-peer financial world, the financial industry is joining the ranks of those implementing blockchain technology to provide better services faster and cheaper. In August 2016, the World Economic Forum reported that 80% of banks are predicted to initiate blockchain technology projects by 2017. According to another report, banks already have invested more than $1 billion in this technology. The biggest shared effort among financial institutions to study and implement blockchain technology is the R3 Con- sortium. On September 15, 2015, R3CEV, LLC, a blockchain technology company, started a consortium with several of the world’s largest banks to study and develop means for using this technology in the financial system. Currently, 70 of the world’s largest financial institutions and other companies take part in the Consortium’s work. As recently as a few months ago, the Consortium reported that it had completed a trial using blockchain technology to facilitate the trading of debt instruments in 40 banks around the world.  The Financial Industry and Governments are Embracing Digital Currencies and Blockchain Technology — continued on page 14