Vancouver blockchain startup Blockchain Tech partners with Visa for settlement pilot
Transcribed from Financial Post
A Vancouver startup has announced plans to help Visa Inc. run a test to explore whether blockchain technology can make settlements between banks more secure and efficient.
Blockchain Tech Ltd. (BTL) announced Thursday that it will provide the software powering the pilot project with Visa. The two companies plan to invite three to six European banks to use BTL’s distributed ledger technology to exchange money and conduct other business.
Guy Halford-Thompson, founder and chief executive of BTL, said his company’s technology has many advantages over competitors like R3CEV LLC, which is working with a consortium of banks including Canada’s Big Five to explore the use of blockchain for similar purposes. Using a combination of the Ethereum platform and its own software, Halford-Thompson said BTL addresses two major problems facing blockchain in finance: Privacy and speed.
“Until now, they’ve kind of been mission exclusive. You could either have privacy and scalability or you could have decentralization, you couldn’t have both,” he said. “We’ve managed to connect the two.”
Blockchain, best known as the technology behind the cryptocurrency Bitcoin, connects computers together to create a public ledger of transactions that can’t be altered without the other parties knowing. Interest and investment has been growing in blockchain’s potential to help parties that don’t entirely trust each other — such as competing banks — settle payments and execute contracts without involving an intermediary.
In banking in particular, blockchain technology has the potential to automate the time-consuming manual processes that happen behind the scenes when banks settle large payments. Banks could also theoretically reduce the cost of transferring money across borders.
In a release, the co-founder of Visa Europe Collab — the innovation lab that is running the pilot project — said he’s excited by the possibilities it presents.
“The opportunity is a fascinating and potentially very beneficial one,” Hendrik Kleinsmiede said. “Through the use of smart contracts and blockchains I believe we can create a fast, compliant and low-cost interbank payment and settlement service, with embedded regional compliance.”
BTL went public on the TSX Venture Exchange in November 2015, making it Canada’s first publicly-traded blockchain company. Before launching BTL, Halford-Thompson and his co-founder ran a bitcoin brokerage firm that brought one of the first bitcoin ATMs to London, England.
Halford-Thompson said he’s excited to put blockchain to the test in a real-world situation.
“We’re taking the bull by the horns,” he said. “Let’s start moving some money over this network and see if we can really bring down some of those costs, reduce some of the friction in today’s payments.”