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One of the more promising adaptations of cryptocurrencies has appeared to be in the rarified world of transaction settlement among banks. International Business Machines Corp. (NYSE: IBM) has launched a number of projects, with and without partners, in the space, and the technology giant announced another one Monday morning.

The company is collaborating with foreign exchange (FX) specialist CLS Group on a proof-of-concept project called LedgerConnect — a distributed ledger technology platform for the financial services industry designed to enable banks, buy- and sell-side firms, finechs and software vendors to deploy, share and consume services hosted on a shared distributed ledger network.

LedgerConnect is launching today with nine financial institutions, including Barclays and Citigroup, and a number of companies that provide services to the banks. The aim is to provide a single, shared and highly secure network on which multiple services can be deployed and used.

CLS Group’s chief strategy and development officer, Alan Marquard, said:

LedgerConnect is part of CLS’s strategy to explore how we can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in the financial markets. We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks.

Marie Wieck, general manager of IBM Blockchain, added:

Building on the success of CLSNet and leveraging the strong relationship CLS has with the world’s leading financial institutions, LedgerConnect is uniquely positioned as a blockchain marketplace for the financial services industry, which will accelerate innovation across the ecosystem with value added services for blockchain networks.

The two companies joined forces nearly two years ago to develop a new settlement service called CLSNet and signed an impressive array of support. JPMorgan Chase, Morgan Stanley, Citibank and Goldman Sachs were among the group.

But CLSNet has hardly been a rousing success. According to Bitcoin.com, the service is scheduled to launch later this summer with only half of the original backers actually planning to sign up.

Over the weekend, Fred Wilson, a co-founder and partner at Union Square Ventures, wrote on his blog:

[W]e still don’t have consensus mechanisms that can scale to transaction speeds that are typical of mainstream web apps, we don’t yet have consensus mechanisms that are both energy efficient and battle-tested at scale, we don’t have an array of development tools that make building applications on this stack easy, quick, safe, and secure, we don’t have hundreds of millions of users with crypto browsers & wallets, and we don’t have all the other things that would need to be in place in order to move into the deployment phase.

Wilson goes on to say that what the crypto players do have is “a frenzy of innovation and financial capital that has gone to crypto companies via traditional means (venture capital, angel capital, etc).” Union Square Ventures includes Coinbase in its current portfolio. The firm was an early investor in Twitter, Etsy and Zynga.

LedgerConnect may succeed with banks where CLSNet appears to have had only moderate success. It’s still early days.

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