In a new report, Raiffeisen Bank International AG successfully verified end-to-end digitized translation of the national currency, establishing partnerships with a blockchain-oriented company called Billon. The pilot works as part of the bank's tokenization platform, called RBI Coin, and should be launched by the end of the year.
Raiffeisen Bank tests tokenization platform
According to reportpublished earlier today, Billon developed the tokenization platform as part of the Elevator Lab bank program, which ended March 5. The system allows banking organizations to use the transfer method, which provides greater confidence in the status of the payment, increased speed, reduced exception handling and the ability to reduce customer requests.
The success of the testing stages of the digitized translation of the national currency allowed both organizations to expand the tokenization platform into a full-fledged pilot project. It will include individual corporate and institutional clients of the bank, explained in the message.
Using Billon's digital distributed cash system, the tokenization platform seeks to "demonstrate how companies can improve their liquidity management, the speed and availability of money transfers between countries, and facilitate new business processes."
After the launch by the end of 2020, the pilot platform will provide complete transparency by supplementing electronic money transactions with additional documents or data. At that time, Raiffeisenbank could deploy the project in the countries of Central and Eastern Europe, where it works.
Despite the fact that accurate end-to-end benefits will be available after the completion of the pilot project, Billon “expects the bank to improve the quality of customer service, differentiate its offer and achieve the efficiency of processes and costs in several categories”.
Blockchain and Banking
The report also notes that among commercial and central banks, there is a growing tendency to develop new blockchain architectures that meet the requirements for payments and data. Thus, this new initiative of Billon and Raiffeisenbank, based on the blockchain, is a step in the right direction, and more such projects may appear in the banking arena in the near future.
“Billon is a great example of a fintech that understands how to adapt blockchain to meet the needs of banks and their customers. Particularly in the COVID-19 situation, banks need to partner with fintech to innovate faster and help clients with payment processing and liquidity needs.” Stefan Angelic, blockchain lead at Raiffeisen Bank International, said.
Physical cash can carry viruses, including COVID-19, according to a recent report compiled by the Bank for International Settlements (BIS). Therefore, the document calls on banks to use digital payment methods, including central bank digital currencies (CBDC).