International Business Machines Corp is considering adopting the underlying technology behind bitcoin, known as the “blockchain,” to create a digital cash and payment system for major currencies, Reuters first reported.
The blockchain – a ledger, or list, of all of a digital currency’s transactions – is viewed as bitcoin’s main technological innovation, allowing users to make payments anonymously, instantly, and without government regulation.
Rather than stored on a separate server and controlled by an individual, company, or bank, the ledger is open and accessible to all participants in the bitcoin network.
The proposed digital currency system would work in a similar way.
“When somebody wants to transact in the system, instead of you trying to acquire a bitcoin, you simply say, here are some U.S. dollars,” the source said. “It’s sort of a bitcoin but without the bitcoin.”
While cryptocurrency still struggles with regulatory issues, IBM is one of a number of tech companies looking to expand the use of the blockchain technology beyond bitcoin, the digital currency launched six years .
The project is still in the early stages and constantly evolving, with concerns about money-laundering and criminal activities yet to be resolved.
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks. “These coins will be part of the money supply,” the source said. “It’s the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain.”
According to the plans, the digital currency could be linked to a person’s bank account, possibly using a wallet software that would integrate that account with the proposed digital currency ledger.
“We are at a tipping point right now. It’s making a lot more sense for some type of digital cash in the system, that not only saves our government money, but also is a lot more convenient and secure for individuals to use”.
Bank of England had also showed interest in the blockchain open ledger, describing it as a “significant innovation” that could transform the financial system.
(image credit: born1945)