One of the world’s largest banks might be looking to get involved in the bitcoin space. Barclays, the famed British multinational, is running a pilot program to test out bitcoins. For now, the trials are only at the “proof-of-concept” stage, meaning that the company is just sticking its toe in the water, so to speak, but the simple fact that a huge multinational is exploring bitcoin is good news.
Barclays is working with bitcoin exchange Safello on the project. Safello’s CEO notes that the involvement of a tier 1 bank in bitcoin, even if only at the proof-of-concept stage, is a good sign for the currency.
Specifically, Barclays is looking to explore how blockchain technology can improve its performance in the financial services sector. With bitcoin rapidly emerging as a preferred online payment system, the opportunity for traditional banks is growing.
Barclays and Safello will work together to develop a payment platform that accepts bitcoins. At the PoC stage, the platform will only facilitate donations to charities, but the range of services offered could be expanded if trials go well.
This past March Safello was selected for Barclays 13 week accelerator program. Safello was only one of ten companies to be selected for the company’s FinTech accelerator, which is being run by Barclays in conjunction with TechStars.
Safello has already managed to process over $6 million dollars worth of bitcoin payments, and has serviced approximately 20,000 customers. While the company was founded only in 2013, it has already emerged as a relatively big player.
Bitcoin slowly growing more mainstream
Traditional banks have generally shied away from bitcoin, even in spite of the currency’s rapid growth and adoption. There are many challenges for traditional banks looking to get involved with the cryptocurrency, including vague legal requirements, the currency’s tie to the Silk Road and other illicit activities, and higher reporting standards.
Many governments have been slowly warming up to bitcoin, however, and even those who aren’t welcoming it are largely remaining ambivalent. Several U.S. court rulings have treated bitcoin as a property of value and thus deserving of legal protections. Recently, the Canadian senate called for a light touch on bitcoin regulations.
With many governments seeming to accept bitcoin, and owing to the size and value of the bitcoin industry, it may only be a matter of time before more traditional banks become involved with the currency.
Barclays announcement made waves, but in the future these types of announcements could become all the more common as more and more traditional banks engage with the bitcoin sector. For many bitcoin users, increased adoption could be a boon.
It should be warned, however, that as bitcoin closer to the mainstream, pressures for regulation and oversight could mount. Elliptic, another bitcoin tech firm, recently announced that it had developed software that would allow banks to track down the identities of wallets. These types of developments could threaten the very nature of the anonymity-heavy, government-free bitcoin currency.