Hoping to formulate, finalize and ultimately launch a digital-only cash system within a period of four years from now, four of Europe and the U.S.’s biggest banks have joined forces to work on a system that would reduce dependency on cash based on the block chain system.

With the hope that the new system would be quicker and a more efficient means towards an alternative to the bank current clearing and settlement process, work on the Utility Settlement Coin (USC) has been jointly initiated by BNY Mellon, Deutsche Bank and Santander, plus U.K. brokerage ICAP who join UBS.

Blockchain, the technology behind bitcoin transactions, would be used for the new system and would be targeted at the institutional clients of the bank. In the world’s most-widely used pure-digital cash system – the bitcoin, every transaction made with the crypto currency is recorded by blockchain which functions like a vast, decentralized ledger for the bitcoin economy. The broader application of blockchian technology has got a number of financial institutions in making use of it.

“Digital cash is a core component of a future financial market fabric based on blockchain technologies,” Hyder Jaffrey, UBS Investment Bank head of strategic investment and financial technology innovation, said in a media statement earlier this week.

Risks would be reduced and capital efficiency would be improved for users as the complexity and time taken to settle trades would be decreased significantly by the USC system, says UBS.

The participation of BNY Mellon, Deutsche Bank and Santander in the project may be a step in the right direction for UBS because the proposed digital coin’s success would rely on its widespread adoption by financial institutions.

But blockchian technology is not the only one available for banks to venturing into the digital currency world. Big names in the banking industry including Goldman Sachs and Citi and several other top banks are now working on their own form of digital-only payment systems and digital currency.

Another hurdle for the USC is getting past the regulators and hence to determine how the USC should function to get regulatory backing, UBS is in discussion with regulators in the meantime. Once a way to get the new system approved by the regulators is done with, UBS can get to work in getting more institutions involved into the project.

“Recent discussion of digital currencies by central banks and regulators has confirmed their potential significance. The USC is an essential step towards a future financial market on distributed ledger technologies,” Julio Faura, head of research and development at Santander, said in a media statement.

The USC would be convertible at parity with a bank deposit and would have vesrios that would be available in all the major currencies, including the U.S. dollar, euro, sterling and Swiss franc, and would e completely based on cash assets.

(Adapted from CNBC)