ItBit reveals bank chain project, not using Bitcoin

On August 14, New York Bitcoin trading platform ItBit revealed a Bankchain project, a private consensus-based ledger system designed to attract corporate financial institutions.

In a new interview, itBit’s head of global operations Steve Wager spoke about the project, which first became known in late July after itBit confirmed it would host a private, one-day summit to promote the BankChain project.

Wager said the conference, called the Bankchain Discovery Summit, attracted 100 participants from 25 leading financial institutions, including securities firms and infrastructure providers for the industry.

Wager said:

“This is a proprietary itBit protocol. It is not a blockchain, but it is derived from blockchain technology. We will not use Bitcoin as a token, but an itBit proprietary token.”

On the subject of market engagement, Wager said the bank chain will seek to attract institutional partnerships, but he provided few details on any current partnerships the platform has secured.

“We’ve really been focusing on the custody and broker-dealer community,” he continued. “We’ve had over 200 unique meetings in New York and California where people have expressed interest in clearing and custody services.”

It is reported that as a new Bitcoin exchange, itBit received US$3.25 million in seed round financing at the end of 2013. Investors included Canaan Partners, Liberty City Ventures and RRE Ventures. At that time, the exchange was still a Singaporean company.

In May of this year, itBit finalized a $25 million Series A financing. With the money, the exchange moved its headquarters to New York.

Inspiration from blockchain

Currently, the Bankchain project is still in its infancy, and the platform is fully operated and used by itBit. Wager pointed out that the Bankchain will be used for itBit’s cash market, and the nodes on the current Bankchain network are only read-only, which means that it has not yet accepted external participants, which is similar to the Ripple network.

Wager stressed that Bankchain was inspired by the Bitcoin blockchain, but is an alternative consensus-based system, and he also said itBit has no plans to open source the Bankchain project.

Looking ahead, Wager said the technology underlying Bankchain is currently undergoing peer review, and he also claimed that itBit has received “soft commitments” from 15家公司to consider integrating the technology.

However, he cautioned that itBit’s potential customers are still learning about the technology, stressing that this requires a lengthy education process.

Talking about the development of the platform, Wager said:

“We have a bitcoin exchange and have launched an OTC market. We will also provide bitcoin lending products within the global community.”

As for obtaining the first BitLicense in New York State, Wager explained:

“We can continue to serve our customers in New York State and the United States,” he said, referring to other exchanges, including market leaders Bitfinex and Kraken, which have chosen to avoid the New York market rather than bear the licensing fees.

He concluded:

“We certainly feel for other exchanges that have left New York State, but we do believe that regulation is a natural evolution for bitcoin commerce and it can bring legitimacy to the system.”

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