Barclays is testing Bitcoin as it looks into the potential of the cryptocurrency for online banking, charity support and other use cases.
Cryptocurrency is defines as digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank- with Bitcoin emerging as the most popular example of this.
The move follows a £10m investment by the UK government into cryptocurrency research, announced in the 2015 budget.
Several banks headquartered in the UK want to find the positives and negatives of implementing cryptocurrencies.
Barclays will initially test Bitcoin support for charities, but plans to look at further support for online banking in the future.
The bank has two research centres in Notting Hill and Old Street, one focused on Bitcoin, the other on blockchain. It also has another research centre in Whitechapel for new technologies to be researched and implemented.
Bitcoin has seen a large drop in interest, but started to recover in late 2014. The Greek financial crisis has helped the cryptocurrency, with a lot of Greek residents using Bitcoin to get past the current capital controls on banks.
Most developed economies have rejected Bitcoin as a ‘currency’, lowering the value of it significantly. The investment by the UK government into research shows there is still some potential of it becoming a recognised currency in the future.
HSBC will also look into Bitcoin implementation. The multinational bank originally called on the government to look into Bitcoin in 2014.