Barclays is about to become the first mainstream bank to openly and directly support bitcoin transactions, The Sunday Times reports. The Daily Mail echoed the news for its huge readership.
Barclays has been experimenting with Bitcoin and working with digital currency start-ups for some time. Speaking at the Morgan Stanley European Financials Conference in London, Barclays’ CEO Antony Jenkins warned the “banking sector has not yet felt the ‘full disruptive force’ of technology – but it will.” He elaborated on the growing concern among financial institutions that faster, cheaper payment systems will start to seduce their consumer and business customers in the coming years. In June, Barclays signed a deal with Bitcoin company Safello to explore financial applications of the blockchain technology that powers Bitcoin.
Barclays is not the only bank to express interest in Bitcoin’s technology and launch internal experiments and pilot projects. In fact, as recently reported by Bitcoin Magazine, major banks including Citi, UBS, Santander, BNP Paribas, and BBVA are taking serious note of Jenkins’ warning and committing resources to preliminary blockchain studies.
Now, as reported by The Sunday Times, Barclays 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 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 has two sites in Notting Hill and Old Street, London, dedicated to researching Bitcoin and blockchain technology, with a combined capacity of 75 staff, and is also operating a blockchain workspace in a revamped warehouse in Whitechapel, east London. The bank “is inviting start-ups, academics, and the government to work at the space to connect with others that are interested in the Bitcoin and blockchain community,” said White.
With this move, Barclays will be the first major bank to help selected customers to receive bitcoin payments directly in their bank accounts, establishing an important precedent. Focusing on charities first seems a very smart decision, which can shield Barclays from the potential regulatory and image problems, giving it time to prove the value of Bitcoin in a context that can’t be easily criticized. It can be expected that, after this first initiative focused on charities, Barclays could consider gradually allowing ordinary business and residential customers to receive bitcoin payments.
The Sunday Times mentions that a Bitcoin company was included in the trade mission to southeast Asia led by U.K. Prime Minister David Cameron a few weeks ago, which underlines the rising status of Bitcoin in Great Britain. On the trade show, Cameron enthusiastically praised the Innovate Finance Manifesto: 2020, issued by Innovate Finance, which aims to advance Great Britain’s standing as a leader in financial technology (fintech) innovation both domestically and abroad and create 100,000 jobs in U.K. fintech.
The manifesto is focused on generic fintech innovation and doesn’t mention Bitcoin- and blockchain-based digital currencies explicitly. However, Great Britain is on its way to becoming a global hub for bitcoin and other digital currencies, with both the government and Bank of England having made recent moves designed to stimulate the development of digital fintech.