Tech Transformers

100 banks have approached us: Bitcoin firm CEO

Written by Luke Graham, special to, reported by Nancy Hulgrave
100 banks have approached us: Blockchain
100 banks have approached us: Blockchain

At least 100 banks have approached a bitcoin wallet provider about integrating the nascent transaction technology into their systems, according to the company's CEO.

Peter Smith, head of a company called Blockchain, thinks these banks could benefit from the technology used by the digital currency.

Bitcoin is a virtual currency that allows users to exchange online credits for goods and services. However, many see the real worth of the cryptocurrency being the technology behind the coin.

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Called the blockchain – the same name as Smith's company - this is a public and transparent ledger of all bitcoin transactions. It works like a huge, decentralized ledger that can securely record and ensure trades.

"Banks historically have been a very closed platform, very process-system driven. (Blockchain) is an open platform," Smith told CNBC Thursday.

"This would be a radical departure from bank strategy."

Read More Bitcoin to be 6th largest reserve currency by 2030: Research

He added that almost anything that a bank does today could eventually be on this protocol.

"It would be much, much more efficient and a lot more cost effective," he said.

According to Smith, many of the firms that have approached him are tier-one banks. He predicts it will take at least three years for the first banks to adopt the technology.

"We are doing some proof of concept with a few banks but I think it's going to be a really long road," he said. "I think the road to transformation for these big institutions is really political and I also think that (the banks) technology itself has some growth to do."

Smith's claims underlined a report from TABB Research released earlier this week. TABB predicts some financial institutions will use blockchain technology as early as next year to track syndicated loan transactions. But it said that applying it to other sectors, such as derivatives and share trading, will take longer.

Meanwhile, the cryptocurrency itself is making a strong recovery from a low of $177 on January 14. It has climbed 88 percent since that trough, helped by a surge in June and July during market turmoil caused by China and expectations of Greece leaving the euro zone. It was trading at $333 on Thursday morning, according to industry website CoinDesk.

Follow Luke on Twitter: @LukeWGraham