ONE of Britain’s biggest high-street banks is about to take the first step in bringing bitcoin, the controversial digital currency, into the mainstream, saying it has the “potential to change financial services”.
Barclays has been conducting experiments into bitcoin in “labs” in London, and working with start-ups. It now plans to test the virtual currency, allowing people to make donations to charities in bitcoin.
The bank has gone into partnership with a “bitcoin exchange”, or spending platform, and aims to begin the experiment by the end of the year. Derek White, chief design and digital officer at Barclays, said: “Barclays is enabling the bitcoin exchange to help charities accept bitcoin.”
Barclays is not the only bank looking into bitcoin, which is seen as a way to carry out transactions immediately without relying on a bank or intermediary. UBS is studying the “block chain”, or database, which records all bitcoin transactions.
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Bitcoin has earned a reputation as the currency favoured by criminals because it circumvents the traditional banking sector, but the technology behind it is expected to reduce infrastructure costs for banks, according to a report co-authored by Santander, the banking group.
Barclays has two sites in London dedicated to researching bitcoin and block chain — the first in Notting Hill, above a bank branch, which can house about 60 staff, and the other in Old Street, near the City, which has room for about 15 desks.
The bank also uses a revamped warehouse in Whitechapel, east London, which White said was used for “inviting start-ups, academics, the government, to work at the space to connect with others that are interested in the bitcoin and block chain community”.
This month, David Cameron included a bitcoin provider on an official UK trade mission to southeast Asia, a move seen as encouraging the bitcoin industry.