Four banks have reportedly partnered on a blockchain project aimed at creating a means to clear and settle transactions worldwide.

BNY Mellon, Deutsche Bank, Santander and UBS – the latter of which first disclosed its work on a so-called "settlement coin" last year – are hoping to launch a commercial-grade blockchain system by 2018, according to The Financial Times. The banks are working with blockchain startup Clearmatics, based in London.

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A formal announcement will reportedly be made tomorrow, FT's Martin Arnold reports.

He explained in the article:

"The utility settlement coin, based on a solution developed by Clearmatics Technologies, aims to let financial institutions pay for securities, such as bonds and equities, without waiting for traditional money transfers to be completed. Instead they would use digital coins that are directly convertible into cash at central banks, cutting the time and cost of post-trade settlement and clearing."

The banks involved have spent much of the past two years working on various applications for the technology, and all four are members of the R3 distributed ledger consortium.

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