Banks have been poking around bitcoin technology for some time to better understand how it works and how they might use it. Now, they appear to be getting a lot more serious about the digital currency.
Over the weekend, Barclays announced (paywall) that it would help charities accept bitcoin payments, making it the first UK bank to support the currency. The new feature is a small but important step toward Barclays—or any bank—fully accepting bitcoin.
Banks across the world have been exploring bitcoin, trying to determine the potential uses for the digital currency and its underlying blockchain technology. While most of these discussions and projects have been private and internal, banks are slowly escalating their bitcoin experiments.
The New York Times reported last week that 75 employees from 15 different financial institutions held a private meeting at Bank of America to discuss using blockchain technology to revamp the foreign currency exchange market. Bitcoin has a number of advantages for forex trading, including near-instant transfer speeds and a much lower cost structure than current methods.
Some hurdles remain before banks widely adopt bitcoin and blockchain technology. There’s still a lot of concern that bitcoin is the currency of choice for illegal activity, and banks are worried about more government scrutiny.