Goldman Sachs develops a 'bitcoin' that it says will allow for instant transactions and settlements

Goldman Sachs has developed its own digital cryptocurrency for a settlement system to trade stocks, bonds and other assets, according to a recently released patent application.

Quartz reported on December 3 that Goldman Sachs filed a patent application for a new virtual currency, SETLCoin, last year. SETLCoin makes securities trading and trade settlement more convenient. The patent application was not published until recently, which is typical of the US Patent and Trademark Office's procrastination.

Although today's trading desks at top financial institutions routinely use lightning-fast technology to execute trades, it still takes days for promised cash and securities (such as stocks and bonds) to actually change hands - a process called settlement.

The time gap between trade execution and trade settlement is a risk for traders. It is always possible that the counterparty to a trade could go bankrupt before handing over cash or securities. In its patent application for SETLCoin , Goldman Sachs said it would guarantee “near-instantaneous execution and settlement” of trades.

The report said that although SETLCoin is a virtual currency, it is not Bitcoin. This further shows that financial institutions are not very interested in Bitcoin itself, but are very interested in the technology behind it - blockchain .

Blockchain is a technical solution that collectively maintains a reliable database in a decentralized and trustless manner. In this solution, each data block contains system information exchange data within a certain period of time, which is used to verify the validity of the information and generate the next block. The public log that is collectively maintained and records Bitcoin transactions by participants is stored in partitioned blocks, and the blocks form a chain structure, so it is called "blockchain".

A global banking consortium is reportedly working with blockchain startup R3 to develop blockchain applications for global finance. American Express recently participated in a $ 12 million investment in startup Abra , which focuses on how to use blockchain technology to complete international remittances. In September , blockchain startup Chain raised $ 30 million in a Series B round of financing from well-known institutions such as Visa , Nasdaq and Citi . Goldman Sachs has also actively explored the Bitcoin field. Goldman Sachs recently participated in a total of $ 50 million investment in payment application Circle , which uses Bitcoin's blockchain technology.

The report said that Goldman Sachs' application for a patent for SETLCoin may indicate that as banks and financial institutions become more familiar with the technology themselves, they may strengthen their own development of blockchain technology.