Africa's Largest Bank Tests Bitcoin Integration System

South Africa's Standard Bank reportedly trialled a bitcoin integration system developed by a company called Switchless.

Johannesburg-based Standard Bank is the largest bank in Africa with more than 53,000 employees. It was founded in 1863, and it reported headline earnings of $1.8bn (£1.1bn, €1.3bn) and total assets of $183bn in 2012.

The system, which is currently being run as an internal pilot, was showcased at Finovate Europe 2014, a conference showcasing cutting-edge innovations in the financial and banking industry held from 11 to 12 February in London.

This is first time a major bank has been testing a bitcoin integration system.

The full deployment of the system at the bank requires regulatory approval, which is expected to be received in the coming weeks by the involved parties.

Switchless

Singapore-based Switchless developed a "fully operational and integrated bitcoin portal system for a large multinational bank", CoinDesk reported.

"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," according to the company's website.

It boasts of internationally mobile teams, who are highly experienced in the design and implementation of financial software and crypto-currency platforms. Its software helps financial institutions enable their users to buy, sell, save, and spend bitcoin, according to a blog by Switchless.

"Our proprietary modular enterprise software allows for partial or full integration into existing financial infrastructures, giving financial institutions maximum flexibility for the unique and complex requirements they face," it said.

Official trading platforms and exchanges run by big banks would give bitcoin more legitimacy, CoinDesk noted.

Furthermore, the banks could easily out-compete smaller independent exchanges for customers as they have more reliability.

The adoption of bitcoins by banks would threaten bitcoin exchanges more than government regulators, according to Jon Matonis, executive director of the Bitcoin Foundation.

Bitcoin was launched in 2009 by developer Satoshi Nakamoto and is traded within a global network of computers. The currency uses cryptography to control the creation and transfer of money. Therefore, they can be transferred without going through banks or clearing houses, reducing fees involved in the services significantly.

The digital currency has steadily been gaining in popularity despite the volatility in its value. The virtual currency exists as software and is not backed by any country or banking authority.