The New York-based multinational banking and financial services firm Bank of New York Mellon Corporation is experimenting with the potentially disruptive digital currency Bitcoin. The banking giant’s dive into the Bitcoin technology comes closely after the Swiss banking major UBS announced that it will open a research lab in London to study the blockchain technology.
BNY Mellon’s Chief Information Officer Suresh Kumar told CIO Journal that, “We want to try it out to see the applicability of [Bitcoin] in our businesses.”
It is only apt that the leading banks enter this domain since Bitcoin, as a digital currency, poses considerable risks to the traditional banking networks.
Like UBS, BNY Mellon will also aim to utilize the Bitcoin technology to make the financial transactions more efficient. Mr. Kumar adds that, “Testing Bitcoin is also consistent with BNY Mellon’s IT strategy to explore emerging open source technologies.”
Senior developer at BNY Mellon Arun Battu has been working on an application built on the blockchain platform using open source code from Bitcoin.org. Since the technology is still new and vastly different from the traditional payment systems, Mr. Battu spent several hours just to properly absorb the decentralized Bitcoin architecture. However, these efforts will now provide actionable insights to fellow members.
Mr. Kumar emphasized that the bank will test BK Coins, an internal codeword for Bitcoins, as company’s new corporate recognition program. This implies that managers can now pay the hard working, well-performing employees in Bitcoins. If the pilot project is successful, Mr. Kumar adds, then the idea may see an expansion.
“There is a big mindset change that comes with many of these new technologies. So if we can find a way to make it tangible, in a controlled environment like our internal employee recognition program, then we have a great opportunity to help our businesses better understand the potential value.”