Quartz reports:
Bank of America Merrill Lynch, Citi, Credit Suisse, J.P. Morgan, and the Depository Trust & Clearing Corporation (DTCC) successfully traded credit default swaps on the blockchain, according to an announcement today.
The blockchain swap demonstrates one of the most noteworthy uses of the technology: the ability to reduce costs of keeping track of securities. Using blockchain tech could save investment banks $16 billion in clearing and settlements by 2020, according to financial services research firm Autonomous Research.
In this case, as in most cases when similar statements are released by companies, “Reducing costs” translates as “firing people and using software instead.”
Blockchain, of course, is the technology underlying bitcoin and other cyber-currencies. As was discusses in the February Science Cafe Concord, it is more likely to have dramatic impact on the world than is bitcoin itself, because it allows secure financial transactions without any intermediary making sure nobody’s lying.
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