Microsoft has struck a deal with a group of leading banks to help develop blockchain-like technology, the U.S. technology giant said on Monday.
Blockchain is the technology that underlies the cryptocurrency bitcoin. It works like a huge, decentralized ledger for bitcoin which records every transaction and stores this information on a global network so it cannot be tampered with. Banks feel blockchain technology can be utilized in areas from remittances to securities exchanges.
Banks around the world are looking into the technology which could disrupt the processes carried out by lenders.
Microsoft and the R3 Consortium, including JPMorgan and Citigroup that is dedicated to researching and delivering new financial technology, said they would work together to "accelerate the use of distributed ledger technologies, also known as blockchain".
Under the terms of the "strategic partnership", Microsoft Azure will be the cloud service provider for R3. Microsoft will provide cloud-based tools, services and infrastructure for R3 as well as dedicated technical architects, project managers, lab assistants and support services, the companies said.
"With intelligent, cloud-based technology, R3 and member banks will experiment and learn faster, accelerating distributed ledger technology deployment," Peggy Johnson, executive vice president of global business development at Microsoft, said in a press release.
R3 and its members will have access to Microsoft's blockchain partners which includes the likes of start-ups Ethereum and Ripple. .