A UBS-led plan to develop a digital cash system was first thought of in 2015. The concept, based on blockchain technology, has won the support of Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street.

The Utility Settlement Coin (USC) was conceived when the Swiss bank UBS and UK-based blockchain company Clearmatics conceptualized a fully asset-backed digital cash instrument that would be cleared and settled via distributed ledger technology such as blockchain. BNY Mellon, Deutsche Bank, Santander and broker/dealer Icap joined in a year later. And now six more major banks have been recruited.

The project is shifting into the next stage of development as per Hyder Jaffrey, head of strategic investment and fintech innovation at UBS. He told Financial Times, “We have been in discussions with central banks and regulators and we will continue that over the next 12 months with the aim of a limited ‘go live’ at the back end of 2018.”

Financial Times has reported that the utility settlement coin aims to let financial groups pay each other or to buy securities, such as bonds and equities, without waiting for traditional cross-border money transfers to be completed. Use of digital coins, that are directly convertible into cash at central banks, would help cut the time, cost and capital required in post-trade settlement and clearing.