Colored Coins Introduces Bankbox, An Open Source Banking Solution

Colu, an Israeli blockchain startup and one of the developers of the Colored Coins protocol, has announced the open sourcing of Bankbox, a new solution for digital currency issuers.

Bankbox is a wallet application for digital currency issuance and management that allows users to provide asset verification credentials, issue digital currencies, track assets, and manage distribution, among many other things.

Bankbox consists of a full Colored Coins node, API, SDK, an explorer, issuance tool and an open source wallet. In the future, it will also allow issuers to launch payment hubs to enable scalable payment infrastructure.

Colored Coins BankBox
Bankbox, Colored Coins

The new solution aims to increase adoption and address the needs of digital currencies issuers around the world. It will provide access to open source tools that are “battled tested and could dramatically reduce banking IT costs,” according to Mark Smargon, co-founder of Colu.

Bitt, a Bitcoin startup based in Barbados and a Colored Coins member and contributor, will be the first deployment of Bankbox. The startup will use Bankbox to issue a digital Barbadian dollar using Colored Coins technology and in partnership with the Barbados central bank.

Bitt aims to provide a local banking infrastructure for the entire Caribbean area.

The announcement comes as the Colored Coins project is undergoing a rebrand and refocus push, moving from being a generic protocol to becoming a blockchain agnostic framework focused on digital currencies and serving the specific needs of issuers.

Colored Coins started in 2013 as a method that facilitates the creation and transfer of digital assets on the Bitcoin blockchain. Throughout the years, the community has grown into a vibrant ecosystem that’s been applying the technology to a broad range of use cases including crypto shares, real estate, digital cash, healthcare, copyrights, and government ledgers.

While the Colored Coins protocol and code are running on top of Bitcoin, the team is exploring ways to integrate its tools with different blockchains. Colored Coins has recently joined the Hyperledger project as an associate developer community and said it will promote interoperability with the Hyperledger ecosystem.

The team also said it is working on adding native support for Colored Coins as part of the official Lightning Network protocol to enable scalability.

“As the ecosystem evolves, we are seeing a consolidation of ideas in the crypto-space, specifically around ‘layer 2’ […] to provide a scalable payment infrastructure on top of a blockchain,” said Smargon. “Another realization that seems evident is that we will not hold the entire human knowledge on one ledger – we will see different ledgers for different use cases and sovereign ledgers across different jurisdictions.”

“The Bitcoin blockchain is still the biggest and most secure digital currency ecosystem in the world and while Colored Coins always was focused on the Bitcoin blockchain in its early days, it has to evolve to stay relevant,” he said.