The USC initiative aims to improve the efficiency of settlements for financial transactions between banks. The project has been in development for almost five years.
A joint initiative of Barclays, Credit Suisse and a number of other large banks – Utility Settlement Coin (USC) – will not be launched in 2020 due to regulatory barriers. Fnality International, the company behind USC’s development, expects to receive regulatory approval in the first quarter of 2021, news agency Reuters reports.
The USC project was launched in 2015 by the Swiss financial holding UBS. The initiative is aimed at creating a more efficient way of settling financial transactions between banks. USC will become a payment instrument and a means of transmitting information about transactions.
The blockchain-based instrument will be the equivalent of fiat currencies backed by central banks and collateralized by cash held by regulators.
Over time, the UBS holding project gained more and more supporters. It is currently supported by 15 organizations, including NASDAQ, HSBC, State Street, MUFG and other large banks.
Last summer, the participants in the initiative founded the company Fnality International and invested £ 50 million in the development of the USC token. At the same time, banks turned to regulators of different countries with a request to support their project and issue Fnality the permits necessary to launch USC. It was expected that the commercial use of the token will be implemented in 2020.
The delay is likely due to concerns from central banks that are wary of such initiatives. So, when Facebook announced the project of the global stablecoin Libra, it received much criticism from regulators. The monetary authorities considered that the project threatened the monetary sovereignty of the countries.
Still, projects like Libra have pushed regulators to look into the central bank digital currency (CBDC). According to the Bank for International Settlements, central banks, representing a fifth of the world’s population, are preparing to issue CBDCs in the foreseeable future.