Royal Bank of Canada explores blockchain loyalty program

     During a roundtable today, Royal Bank of Canada (RBC) President and CEO Dave McKay called the distributed ledger underlying bitcoin a “quantum innovation.”

    Speaking at the RBC Capital Markets Conference in New York, McKay discussed RBC’s ongoing blockchain experiments, noting that the bank could launch a loyalty program using the technology sometime in 2016.

    In his remarks, McKa said he believes banks’ experiments with blockchain need to be approached “with caution,” echoing comments made by a U.S. Securities and Exchange Commission (SEC) commissioner earlier this week.

     "This is a brand new technology, and what do we really know about it? How is it cyber-secure? We need to learn more about this technology," McCay said. "Given the stakes, this is not something you can rush to market and fix as you wish. You hope it works."

     McKay believes RBC is currently looking for low-risk ways to introduce the technology to clients, and a loyalty program is the right fit at this moment, according to American Banker.

     According to the report, McCay showed little interest in Bitcoin as a use case for the digital currency, noting that he did not believe the application would solve consumer problems.

     Notably, RBC was one of 13 major banks that announced a partnership with distributed ledger startup R3CEV in September. To date, R3 has attracted 25 of the world’s largest financial institutions.

     As such, McKay stressed that a collaborative approach may be the best way for the technology to reach the mass market.

     RBC is Canada's largest bank by assets and market capitalization, employing 78,000 people and with $343 billion in assets at the end of 2014, according to company estimates.