The companies involved include ANZ Bank, Cisco, CLS, Credits, Digital Asset, Fujitsu, IC3, IBM, Intel, London Stock Exchange Group, Mitsubishi UFJ Financial Group (MFUG), State Street, SWIFT, VMware and Wells Fargo.
Their goal is to create a distributed ledger that can be used by anyone and is maintained by a group. They are starting with technology from Digital Asset called Hyperledger, which Digital Asset is contributing to the group. Many of the other companies are also contributing technology they've been working on separately.
Applications built on top of a distributed ledger have the power to completely change how anything of value is tracked and traded.
What are distributed ledgers?
By now, you may have heard of bitcoin, a digital form of cash. The technology used to keep track of who has the cash, and who is paying who with it, is known as "blockchain." And it turns out blockchain can be used for all sorts of other things besides tracking bitcoins.
Blockchain is basically a way of taking a database and splitting it up among many, many computers, so that one entity doesn't control the database. Blockchain uses encryption to protect the data and keep track of who is making payments, who is getting paid, and their balances. Altogether this is known as "distributed ledgers."
It's a completely new and fast way of trading and tracking things of value that can, for instance, speed up payments processing, enable manufacturers to share production logs with their suppliers, and do all sorts of things because many parties share a database and a ledger.
One publicly traded company, Overstock, just received SEC approval to use blockchain to issue stock.
But before all these wondrous apps can be built and start changing how business is conducted, the industry has to have a blockchain and distributed ledger system that they feel is safe and secure and compliant with regulatory needs.
That's what the group hopes to build together.