Update (13th February, 14:40 GMT): Representatives from Standard Bank say that it has finished testing the Switchless bitcoin trading platform, and that it will not be made available to customers.
The bank said the test is part of wider research on “Internet-based financial services”, and that eight internal Standard Bank employees participated in the completed pilot.
A company called Switchless says it has developed a “fully operational and integrated bitcoin portal system for a large multinational bank”, currently being run as an internal pilot.
The news leaked out after the system was showcased at Finovate Europe 2014, which was held from 11th – 12th February in London. The software is reportedly being trialled by South Africa’s Standard Bank, the largest in Africa.
Announced at #finovate. Standard Bank running internal bitcoin pilot powered by @goswitchless pic.twitter.com/kM8NPc16E3
— Jim Bruene (@netbanker) February 11, 2014
This is first time a major bank has trialled a bitcoin integration system, and Switchless says it is pleased with the results so far. All that is required for full deployment at this stage is a regulators’ approval, which the companies are hoping to receive in the coming weeks.
Banks and bitcoin
This news will come as a surprise to many. Not only have most major banks and money transfer businesses avoided involvement with bitcoin, some have been downright hostile by closing accounts with any discernible link to cryptocurrencies.
Official trading platforms and exchanges operated by big banks would give bitcoin mainstream legitimacy like no startup could, and they could easily out-compete smaller independent exchanges for customers. There might even be the potential for partnerships and acquisitions in that space.
Jon Matonis, Executive Director of the Bitcoin Foundation and a CoinDesk contributor, had this to say:
This picture threatens bitcoin exchanges more than government regulators (via @netbanker) #Finovate pic.twitter.com/Zxvgu0PvJ2
— Jon Matonis (@jonmatonis) February 12, 2014
Switchless itself is headquartered in Singapore. Its website states:
“Switchless develops enterprise bitcoin software for leading global banks, private wealth managers and brokerage firms, making it easy for them to bring bitcoin to their customers. Our internationally mobile teams are highly experienced in the design and implementation of financial software and crypto-currency platforms.”
Africa’s largest bank
The Standard Bank of South Africa, part of the Standard Bank Group, is headquartered in Johannesburg and is Africa’s largest bank with over 53,000 employees. Founded in 1863, in 2012 it had headline earnings of US$1.8bn and total assets of $183bn.
Finovate is a two-day showcase of cutting-edge innovations in the financial and banking industry, including both large corporations and smaller startups such as Switchless. The first Finovate Europe in 2013 attracted over 740 attendees.