Standard Chartered part of £41m investment in blockchain start-up Ripple
Standard Chartered has become the latest bank to invest in blockchain, the technology behind Bitcoin, helping pump 55 million US dollars (£41.7 million) into start-up Ripple.
It is the bank's first investment in blockchain technology, which was originally developed as a hub to track transactions in crypto-currencies including Bitcoin, but has since gained traction among mainstream lenders.
Standard Chartered said the "strategic investment" was made in light of the bank's "digitisation agenda".
Global lenders have been banking on blockchain to slash costs as competition and record low interest rates squeeze profit margins.
Blockchain serves as a central ledger to track and verify transactions, virtually cutting out the need for fee-charging middlemen.
Ripple works as back-end software that handles the messaging, data and liquidity needed to settle cross-border bank payments and transactions on the blockchain.
Daniel Aranda, managing director of Ripple's European operations, said the online, decentralised nature of blockchain opens the door to a global network where banks and customers can move money nearly instantly, while traditional methods of payment clearing can take days.
"Our mission is to make cross-border payments as efficient as possible," he said.
Ripple's 55 million US dollar (£41.7 million) series B funding round was also backed by the likes of Westpac, National Australian Bank (NAB), BMO Financial Group, Mizuho Financial Group, Siam Commercial Bank and Shanghai Huarui Bank.
It brings Ripple's total funding to around 93 million US dollars (£70.2 million), and adds to the growing list of lenders building ties with the firm, including Santander, UniCredit, UBS and Royal Bank of Canada (RBC).
Standard Chartered said it started working with Ripple in December and has secured an "observer" seat on the company's board.
It comes months after the San Francisco-based firm opened its first London office in March.
Mr Aranda said the move would serve existing European clients - which make up about half of Ripple's customer base - and forge ties with new lenders in one of the world's biggest financial hubs.
"The UK has a long history of really being on the leading edge of thinking about what's possible with payments and settlements infrastructure.
"The faster payments system that exists here, that allows me to instantly send funds over the banking system to someone else domestically, that was one of the first real-time clearing systems that was made available just to everyday users.
"I think that's informed a lot of the sophistication that's here in the marketplace," Mr Aranda said.
Despite rumours that financial services could leave London after Brexit to gain access to the European Union's single market, Mr Aranda said Ripple will maintain a base in the UK.
"We definitely still believe that London will continue, and remain, a financial services centre," Mr Aranda added.