Can big banks successfully develop their digital cash?

After the surprisingly sharp increase in the value (price) of Bitcoin, the idea of cybercurrency as well as the blockchain technology hasve been attracting more and more attention. Many large banks have been planning to develop their digital cash. Citigroup is working on its own “Citicoin” solution, and Goldman Sachs has filed a patent for a “SETLcoin”, JPMorgan is also working on a similar project. The largest digital cahs programme in the banking industry is “utility settlement cash”, created by UBS, and Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have teamed up to work on this programme, and Deutsch Bank, Santander, BNY Mellon and the broker ICAP have also participated in this programme.

The digital cahs is introduced to reduce the transaction costs within the banking and financial industry via the Blockchain technology. They are not planning to introduce a digital cash to replace the currently existing currencies, and they are definitely not aiming to replace the current global monetary system either. However, if they are able to develop a industry currency or exchange method that successfully reduce or even eliminate transaction costs, other industries and groups are likely to copy their mode.

Therefore, in the future, we probably will see many different digital exchange mediums developed by many indsutries and sectors. However, I expect there would be a brutal competition among these digital exchange mediums including Bitcoin, and only one would survive and become the only winner.