It wasn’t but a couple of years ago when the world’s largest banks and corporations were busy dismissing and openly mocking Bitcoin and anything associated with it. Now, the world’s largest corporations can’t get enough of its technology and now refuse to be left to their own patchwork of systems that Bitcoin has now made obsolete.
On Tuesday, Microsoft and Bank of America/Merrill Lynch announced a new landmark partnership to use Bitcoin’s Blockchain technology to improve financial transactions between consumers, business, and the banking industry. The announcement was made at the annual three-day Sibos conference in Geneva.
"By working with Bank of America-Merrill Lynch on cloud-based blockchain technology, we aim to increase efficiency and reduce risk in our own treasury operations," announced Microsoft chief financial officer Amy Hood. “Businesses across the globe − including Microsoft − are undergoing digital transformation to grow, compete and be more agile, and we see significant potential for Blockchain to drive this transformation.”
At the core of the collaboration will by Microsoft’s Azure platform, introduced last November, which was designed towards being a testbed for Blockchain technology applications. As has been the case for many years inside of Bitcoin’s protocol, the key benefit for this application will be creating far faster, cheaper, more efficient transactions that the current legacy banking systems can employ.
Industries around the world, banks, in particular, are looking to find ways to become as efficient as Bitcoin’s digital currency system without decentralizing their business model. Integrating some version of the Blockchain technology may help them improve Bank of America’s operations over the coming years. Development and testing of the initial application, built to optimize the standby letter of credit process, is already in progress.
“The potential benefits of Blockchain will help drive meaningful supply-chain efficiencies to the clients of both Microsoft and the bank. This project is another example of our continued commitment to introduce financial innovations for the betterment of global commerce,” said Ather Williams, head of Global Transaction Services at Bank of America Merrill Lynch.
This is quite a big deal, given the fact that Microsoft has done a very good job of integrating their Azure platform into the global banking system already. More than 80 percent of the world’s largest banks are Azure customers already. Furthermore, over 75 percent of the global systemically important financial institutions are using Azure.
Who knows? Maybe they can get the current three-day wire transfer system cut down to two or three hours within the next two to three years. This would still take considerably longer than the average Bitcoin transaction, but hey, nobody’s perfect.