It is not a big secret that the banks are working on adopting blockchain technology in their operations. They intend to use Bitcoin’s underlying technology to create their own network to transfer funds between branches. The banking consortium consists of over 40 international banks, working together with a New York-based fintech company — R3CEV to create a blockchain solution that can replace the existing SWIFT network for overseas transfers.
According to reports, a new digital cryptocurrency has been developed by the computer scientists in the University College London. Called, the RSCoin, this digital currency prototype is developed in association with the Bank of England – the British central bank.
Unlike Bitcoin, which is a decentralized distributed digital currency, RSCoin is a centralized digital currency that borrows most of the important things from Bitcoin itself. The development of RSCoin started after the Bank of England expressed its interest in having a secure digital currency designed for potential use in the country.
Comparing RSCoin with Bitcoin, the former’s ledger will be completely under the control of central bank whereas no one person controls the Bitcoin distributed ledger. The creators of this coin believe that it will draw mass adoption as a trusted entity will be in charge of the digital currency that can do many things similar to that of bitcoin.
However, the very idea of Bitcoin is to prevent any single person or entity to exert control over the currency. People who adopt bitcoin do so, because of these advantages. RSCoin does just the opposite and it is still not sure how that will make any difference over existing electronic payment options for customers.
RSCoin has limited functionality in the face of already existing payment options from MasterCard and Visa which also enables P2P payments these days. Apart from taking away some part of the control from private and commercial banks, RSCoin may not do much to the monetary system.
Central Banks are definitely interested in digital currencies, but as long as these digital currencies are controlled by a central authority, Bitcoin will continue to stand apart.