BNY Mellon experiments with bitcoin

BNY Mellon experiments with bitcoin

Bank of New York Mellon has begun playing with bitcoin, using blockchain technology to build an application on its internal network.

The bank's CIO, Suresh Kumar, told the Wall Street Journal that the experiment is designed to help find ways to make transactions more efficient and is also part of a wider commitment to open source technology.

A senior developer, Arun Battu, has spent months building an application using open source code from Bitcoin.org, modifying it to run on BNY Mellon's internal network. Battu says that the shift from client-server architecture to bitcoin's peer-to-peer model has been his biggest challenge.

The bank now plans to use bitcoins for an incentive programme, with IT managers handing them out to staff, who can then redeem them for gift cards and vouchers.

"There is a big mindset change that comes with many of these new technologies. So if we can find a way to make it tangible, in a controlled environment like our internal employee recognition program, then we have a great opportunity to help our businesses better understand the potential value," Kumar told the Journal.

BNY Mellon is not the only bank looking into bitcoin. Last week Swiss bank UBS outlined plans to open a London innovation lab in Level39's high growth space, HighGrowth:42, to explore the role of blockchain technology in financial services. Tech giants Intel and IBM have also been sniffing around cryptocurrencies.

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