De Nederlandsche Bank is working on prototype blockchain-based DNBcoin

De Nederlandsche Bank wants to develop a concrete prototype of the DNBcoin, based on blockchain technology. It is not yet clear what the exact plans are with the virtual currency. DNB classifies the development as one of the objectives for 2016.

The DNBcoin was noticed by website Coindesk in DNB’s annual report. The document sets out the bank’s goals for 2016, and the creation of a prototype of the virtual currency is grouped under the heading ‘devotion to sustainability in the payment system’.

The annual report does not provide any further information about the virtual currency. The bank does write that it expects a lot from blockchain technology in the long term. The bank mentions low costs, speed and transparency as advantages.

With the prototype of the DNBcoin, the bank probably wants to further investigate the technology itself. Furthermore, the bank writes in its report that blockchain technology can affect banks’ revenue models and systems, but that they can also benefit from it with new ways to generate revenue and reduce costs. The bank also emphasizes that various issues still need to be investigated, such as risk management and the possible need for regulation.

Not only DNB is experimenting with blockchain technology. In England, researchers recently proposed RSCoin, a bitcoin alternative that should be managed by the Bank of England.

A major blockchain technology test was recently completed, commissioned by a consortium of 42 banks. The outcome of that survey has not been disclosed, but its scale indicates that the financial sector is taking technology seriously.