Banks and government organizations are beginning to accept the reality, are slowly entering the Bitcoin market

Sep 18, 2015 19:42 GMT  ·  By

In the past week, two important news stories have surfaced involving Bitcoin, some of the world's biggest banks, and government finance agencies, which leads us to believe the digital currency is about to be slowly adopted into the daily routine of the banking and trading fields.

In an announcement on its website, the US Commodity Futures Trading Commission (CFTC) has officially recognized "Bitcoin and other virtual currencies [as] a commodity covered by the commodity exchange act."

This decision came after the commission and the FBI carried out an investigation into the activities of Coinflip, Inc., a company operating Derivabit, a platform that allowed users to easily buy and sell Bitcoin.

The CFTC made the announcement on September 17, and by the next day, Conflip and the FBI reached a legal settlement, after the CFTC and the Bureau accused it of "operating a facility for the trading or processing of commodity options without complying with the CEA or CFTC Regulations."

The biggest banks in the world are looking into Bitcoin blockchain technology

But the biggest news regarding Bitcoin came on Tuesday, September 15, when Reuters broke a story announcing a collaboration between some of the world's nine largest banks, which were actively looking into blockchain technology, the base tech that runs all the Bitcoin cryptocurrency variants.

Blockchain, an encrypted database of all Bitcoin transactions distributed across multiple machines, is what makes Bitcoin such a secure, unhackable system.

By involving everyone that has a machine inserted in the blockchain in the verification of Bitcoin transactions, it is extremely difficult, nearly impossible, to execute fake or fraudulent exchanges.

This high level of security is what attracted the banks, which, besides wanting a piece of the Bitcoin pie, said that blockchain technology could also be used for exchanging other types of information, without having third-parties verify it, all at much lower costs than their current tech, and at much higher speeds.

The nine banks that expressed their interest are JP Morgan, State Street, UBS, Royal Bank of Scotland, Credit Suisse, BBVA, Commonwealth Bank of Australia, Goldman Sachs, and Barclays.

According to Reuters, the nine have been investigating the technology for more than a year, with the help of R3, a US tech firm, which they plan to use to built their own blockchain database.