Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS) are supposedly working together on a blockchain venture.
Telstra is Australia’s largest telecommunications company and Commonwealth Bank is the largest Australian bank, so they make for sizeable partners.
The Potential CBA And Telstra Blockchain JV
Two companies are working together on a blockchain project to offer higher levels of security for high-value transfers and transactions done online, according to Australian Financial Review reporting, an electronic escrow service.
This isn’t just a fanciful idea the two of them are considering starting, they have been working on the project for months, with Telstra tasking some of its top programmers to work on the concept. Two of the figures on the job are an emerging technology specialist and an internet of things engineer.
The blockchain technology behind this initiative is extremely respected by the technology community, it apparently opens up many potential technologies, such as the one being worked on by Telstra and Commonwealth Bank.
It’s also the technology behind the cryptocurrencies like Bitcoin and Ethereum. Although cryptocurrencies haven’t (yet?) replaced traditional forms of money, the underlying technology that allows them to work is what is impressive.
This isn’t the first thing that Commonwealth Bank and Telstra are working on together. They are also working with Ericsson to try out ‘5G edge computing’ which could deliver faster service with much less infrastructure. The Ericsson partnership could also lead to better identification and help support artificial intelligence.
Will This Lead To Anything For Telstra And CBA?
You can see how CBA would want the best technology available for the safe transfer of money from and to its banking customers. However, I’m not sure that customers would be willing to pay much more, if anything, for the service.
Don’t forget that Freelancer Ltd (ASX: FLN) also runs an escrow service alongside its main freelancer portal. Freelancer’s entire market capitalisation is only $350 million. So even if CBA and Telstra could add a shared $350 million to their market caps, it would hardly move the dial.
Although new technology is exciting and useful, it may not actually add much monetary value to earnings.
That’s why, rather than CBA and Telstra, I would prefer to invest in the proven ASX growth shares in the free report below.
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