In a move that should be of no surprise to anyone familiar with the space, Citibank has admitted to running a test platform for digital currencies and is pondering its own solution, CitiCoin.
According to the International Business Times, Citigroup has built its own digital currency based on bitcoin and the blockchain. This, in itself, isn’t very difficult – anyone can create a cryptocurrency in a few seconds with a bit of programming knowledge. But the fact that Citibank, at least in its R&D arm, is looking into the technology is promising.
The IBT quoted Kenneth Moore, head of Citigroup Innovations Lab:
Moore also saw this as a way to move money from country to country and foresaw an internal “mining” network that allowed endpoints to generate the work necessary to maintain the ledger.
While it’s noble for banks to attempt these systems – and they will be attempted again and again – it’s important to note that banks want control. As I wrote before banks are not afraid of cryptocurrencies, they’re just nervous. Once one of these systems begins coming online regulators will be forced to take notice and this means everything – from dogecoins to bitcoins to citicoins – will become targets of scrutiny.
In May Bitcoin Magazine noticed a line in a Citigroup presentation that should remove any doubt that banks are definitely interested in this technology – and what they think of wild and wooly bitcoin. “Due to the potential benefits, we believe the adoption of Digital Money is inevitable,” they wrote. “While we believe that the use of Digital Money is certain, the future of specific cryptocurrencies such as Bitcoin is less clear.”
CitiCoin: The Future of Digital Money?
CitiCoin is a digital currency that uses cryptography and mining techniques similar to Bitcoin. The term and the currency itself have no existence and meaning beyond the walls of Citibank R&D department. Kenneth Moore who heads the innovations lab at Citibank confirmed the creation of this currency in the labs and added that this is still in testing phase.
The current development by the bank may just be an attempt to showcase their interest in the field of digital money. However, the possibility of widespread use of CitiCoin is not possible soon enough. Also, such custom currency might not be accepted beyond Citibank branches. It is difficult to popularize such a currency as it is easy to create a crypto-currency and every bank can create its own digital currency if it so desires.
The Hope For Change
The world is changing fast and the need for digital currency will soon become a pressing issue. BitCoin is already there but there is no regulatory authority for it and it is not legal in many countries. In near future, digital currency will replace physical currency and the financial transactions will be completely based on digital money.
The current development for such a currency from a financial institution like Citibank is a promising sign. Citigroup Inc (NYSE:C) might launch this currency. If it does, it will be interesting to see how this currency succeeds.