DOCSLIB.ORG

Project Jasper

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Project Jasper Project Jasper: A Canadian Experiment with Distributed Ledger Technology for Domestic Interbank Payments Settlement White Paper prepared by: Payments Canada, Bank of Canada 1 and R3 Introduction ........................................................ 3 Anticipated Benefits of DLT and Its Application to Interbank Settlement ............. 4 Project Jasper: Background, Scope and Objectives .......................................... 8 Key Hypotheses and Considerations Addressed by the Project ................................. 12 Current Environment for Wholesale Interbank Payments Settlement ...................... 15 Overview of the Jasper Platform ...................... 18 Evaluating the Merits of the Phase 2 Platform .............................................. 29 Performance of the Jasper platform ................ 34 Other Key Lessons Learned from Our Experience ................................................. 38 TABLE OF CONTENTS Concluding Remarks and Next Steps ............... 39 References ....................................................... 41 Appendix 1: Jasper Phase 1 Overview .............. 42 Appendix 2: Technical Overview of Jasper Phase 2 ............................................. 46 Appendix 3: PFMI Considerations .................... 58 Appendix 4: An Overview of Canada’s Large Value Transfer System ........................... 65 1 Discussion in this report is complementary to Chapman et al. (2017). Abstract roject Jasper is a collaborative research initiative by Payments Canada, P the Bank of Canada, financial innovation consortium R3 and a number of Canadian financial institutions to understand how distributed ledger technol- ogy (DLT) could transform the future of payments in Canada. The project was launched in March 2016, and since then two phases of exploration into the use of DLT for wholesale interbank payments settlement have been successfully completed. This paper describes the project’s findings to date. Since incep- tion, the project team has had the opportunity to explore and compare two distinct DLT platforms for the chosen use case—an Ethereum platform and an R3 Corda platform—while also building some of the key functionality found in wholesale interbank settlement systems today. Specifically, in the second phase the project team successfully built a liquidity-saving mechanism (LSM) in the form of a central queue on top of the latter platform to help economize on liquidity and promote smooth intraday flow of payment transactions across the platform. Interestingly, the analysis thus far is suggestive that DLT platforms that employ a “proof-of-work” consensus protocol, as was built in Phase 1, do not deliver the necessary settlement finality and low operational risk expected of core settlement systems. Phase 2, however, built a distribut- ed ledger system that employed an alternative consensus model on the basis of a “notary node” that could deliver improvements in regard to settlement finality, scalability and privacy. While there is still much analysis to be completed, the project team continues to work on improving the ability of a DLT platform to observe the international Principles for Financial Market Infrastructures (PFMIs) that must be met by a distributed ledger wholesale interbank payments settlement system. PROJECT JASPER // A Canadian Experiment with Distributed Ledger Technology for Domestic Interbank Payments Settlement 1 Acknowledgement of contributors The following individuals are acknowledged for their contribution to this White Paper. Payments Canada: Andrew McCormack Joshua Burrill Kathryn Martin Neville Arjani Bank of Canada: Scott Hendry James Chapman Dinesh Shah Adrian Guerin R3: Rod Garratt Clemens Wan PROJECT JASPER // A Canadian Experiment with Distributed Ledger Technology for Domestic Interbank Payments Settlement 2 1 Introduction section n recent years, material global resources have DLT demonstrates much promise in a number of I been devoted to developing and implementing global industries, given the benefits mentioned above. solutions in the area of financial technology—or fintech—which leverages technology to support This report presents early findings from Project innovation and improvement in the provision of Jasper, a collaborative research initiative undertak- financial services. Product solutions developed by en by Payments Canada, the Bank of Canada, the players in this space, including venture start-ups, financial innovation consortium R3 and a number of financial institutions, industry consortia, academics Canadian financial institutions to understand how and central authorities, can encompass new busi- DLT could transform the future of payments in ness models, applications and processes. Some Canada.3 Project Jasper was launched in March solutions that are already having an impact on the 2016, and since then two phases of exploration into provision of financial services fall in areas such as the use of DLT for wholesale interbank payments trade finance, asset management, capital markets, settlement have been successfully completed. The retail and business lending, supply chain manage- report discusses the background and rationale for ment and, of course, payments. Fintech solutions the project, highlights governance and organization, are marketed with the prospect of reduced complex- and, perhaps most importantly, elaborates on the ity and cost, greater transparency, enhanced product development of a proof-of-concept DLT design for and service customization, and improved access for interbank settlement (hereafter referred to as the consumers of financial services around the world. “Jasper platform”) as a way to inform the hypothe- ses of the project team. A technical appendix One fintech innovation that has garnered much (Appendix 2) also accompanies the main text, offer- attention recently is distributed ledger technology ing further information on the development of the (DLT). DLT, which includes blockchain technology, is Jasper platform, including in the context of the inter- perhaps best known as the technology underpinning national Principles for Financial Market Infrastruc- the cryptocurrency system Bitcoin.2 New use cases tures (PFMIs) (Appendix 3).4 The PFMIs represent seeking to leverage DLT to improve the client experi- global guidance for the management and control ence and/or improve the efficiency of asset transfer of key risks including credit, liquidity, operational emerge almost daily and extend well beyond the and general business risk. The report concludes by creation and exchange of digital currencies. Indeed, outlining possible next steps for the project. 2 See Nakamoto (2008). 4 The PFMIs, which were published by the Bank for International 3 The Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Settlements (BIS) in 2012, can be found on the BIS website at Commerce, Royal Bank of Canada, and TD Bank participated in both http://www.bis.org/cpmi/publ/d101a.pdf. Phases 1 and 2 of the project. National Bank of Canada and HSBC Bank Canada joined for Phase 2. PROJECT JASPER // A Canadian Experiment with Distributed Ledger Technology for Domestic Interbank Payments Settlement 3 Anticipated Benefits of DLT and Its 2 Application to Interbank Settlement section hat is special about DLT, and what does it should have a conflicting view of the transaction for W aim to address that current systems and it to be recorded). The database is updated in real processes do not? In August 2016, the World Economic time as transactions are validated, which affords Forum (WEF) published an extensive report on the timely exchange of value and access to trade and/or prospect of implementing DLT across a range of position information from the same trusted source. financial services areas.5 The WEF report describes DLT as a repository of information (or database) DLT enables collaboration among parties to main- underpinning asset exchange between parties over tain a single, updated record of transaction activity. one or more peer-to-peer network platforms. This shared representation of data and common Importantly, the notion of a “distributed” ledger process can reduce or eliminate the need for error- means that a common database is maintained and prone internal record-keeping by each party. With shared amongst all parties to the arrangement.6 DLT, each party records transaction activity as an This allows each party to an agreement to maintain agreed set of data signed by all counterparties, a consistent copy of the same transaction record on eliminating the need to reconcile internal transac- a proprietary ledger, and every recorded change to tions since the data have been agreed and attested the database to be synchronized across all copies to by all parties and cannot be changed by one party of the ledger. acting alone. The likelihood of disputes is therefore reduced, and regulatory compliance requirements As well, strict protocols are established to govern by can more easily be met through reliance on a whom, and how, changes to the database are carried mutually agreed transaction history. out to prevent unauthorized (and possibly malicious) edits to ledger content. These protocols are also de- The need for a central database and, more important- signed to eliminate incidents of “double-spending” ly, a trusted database operator to house transaction where a party to the arrangement either purposely records between parties may also be eliminated with or inadvertently tries to transfer the same asset over DLT. In some instances, it can prove
Load more

Recommended publications
  • Project Jasper: Are Distributed Wholesale Payment Systems Feasible Yet? BANK of CANADA • Financial System Review • June 2017 1
    PROJECT JASPER: ARE DISTRIBUTED WHOLEsaLE PayMENT SysTEMS FEASIBLE YET? BANK OF CANADA • FiNANCIAL SYStem Review • JuNE 2017 1 Project Jasper: Are Distributed Wholesale Payment Systems Feasible Yet? James Chapman, Rodney Garratt,1 Scott Hendry, Andrew McCormack2 and Wade McMahon Distributed ledger technology (DLT)—most commonly known as the foun- dation of Bitcoin—offers a fundamentally different way to conduct and track financial transactions. Researchers are investigating its usefulness in all corners of the financial system. Project Jasper is a proof of concept of a DLT-based wholesale pay- ment system. The experiment provided significant insights into the relative strengths and weaknesses of using DLT for financial market infrastructures. For critical financial market infrastructures, such as wholesale payment systems, current versions of DLT may not provide an overall net benefit relative to current centralized systems. Recent versions of DLT have, however, made advances compared with initial cryptocurrency applica- tions of DLT. Benefits for the financial system of a DLT-based wholesale payment system could likely arise from its interaction with a larger DLT ecosystem of finan- cial market infrastructures, potentially including cross-border transactions. Introduction Financial technology (fintech) is defined as financial innovation enabled by technology that could result in new business models, applications, pro- cesses or products and that has an associated material effect on financial markets and institutions or the provision of financial services.3 One such innovation with significant potential is distributed ledger tech- nology (DLT), or blockchain, as a common variant of it is known (Box 1). DLT, introduced with the cryptocurrency Bitcoin in 2008 (Nakamoto 2008), enables the secure validation and recording of transactions.
    [Show full text]
  • IRS, Will You Spare Some Change?: Defining Virtual Currency for the FATCA
    Valparaiso University Law Review Volume 50 Number 3 Spring 2016 pp.863-911 Spring 2016 IRS, Will You Spare Some Change?: Defining Virtual Currency for the FATCA Elizabeth M. Valeriane Valparaiso University Law School, [email protected] Follow this and additional works at: https://scholar.valpo.edu/vulr Part of the Law Commons Recommended Citation Elizabeth M. Valeriane, IRS, Will You Spare Some Change?: Defining Virtual Currency for the FATCA, 50 Val. U. L. Rev. 863 (2016). Available at: https://scholar.valpo.edu/vulr/vol50/iss3/10 This Notes is brought to you for free and open access by the Valparaiso University Law School at ValpoScholar. It has been accepted for inclusion in Valparaiso University Law Review by an authorized administrator of ValpoScholar. For more information, please contact a ValpoScholar staff member at [email protected]. Valeriane: IRS, Will You Spare Some Change?: Defining Virtual Currency for t IRS, WILL YOU SPARE SOME CHANGE?: DEFINING VIRTUAL CURRENCY FOR THE FATCA I. INTRODUCTION The founding father commemorated on the one-dollar bill said, “[t]o be prepared for war is one of the most effectual means of preserving peace.”1 Although the quote relates to war, we adopt the underlying message as it relates to law. Arguably, creating law is the most effective means of resolving future legal disputes, especially issues that emerge when applying yesterday’s law to the ever changing norms of today’s society. Cryptocurrency, a type of electronic money, presents many legal issues as this new medium of currency has found its way into the world’s economy.2 Not to be confused with other digital currency, such as game awards or airline miles, cryptocurrency is not confined to a defined 1 George Washington, President, State of the Union Address (Jan.
    [Show full text]
  • Introducing Ethereum and Solidity Foundations of Cryptocurrency and Blockchain Programming for Beginners — Chris Dannen Introducing Ethereum and Solidity
    Introducing Ethereum and Solidity Foundations of Cryptocurrency and Blockchain Programming for Beginners — Chris Dannen Introducing Ethereum and Solidity Foundations of Cryptocurrency and Blockchain Programming for Beginners Chris Dannen Introducing Ethereum and Solidity: Foundations of Cryptocurrency and Blockchain Programming for Beginners Chris Dannen Brooklyn, New York, USA ISBN-13 (pbk): 978-1-4842-2534-9 ISBN-13 (electronic): 978-1-4842-2535-6 DOI 10.1007/978-1-4842-2535-6 Library of Congress Control Number: 2017936045 Copyright © 2017 by Chris Dannen This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Trademarked names, logos, and images may appear in this book. Rather than use a trademark symbol with every occurrence of a trademarked name, logo, or image, we use the names, logos, and images only in an editorial fashion and to the benefit of the trademark owner, with no intention of infringement of the trademark. The use in this publication of trade names, trademarks, service marks, and similar terms, even if they are not identified as such, is not to be taken as an expression of opinion as to whether or not they are subject to proprietary rights. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made.
    [Show full text]
  • Reflections on the Canadian Payments Systems: from Manual Clearing to Electronic Funds Transfers
    REFLECTIONS ON THE CANADIAN PAYMENTS SYSTEMS: FROM MANUAL CLEARING TO ELECTRONIC FUNDS TRANSFERS by ALISON L. KIRBY B.A., McGill University, 1981 LL.B., The University of Ottawa, 1987 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS in THE FACULTY OF GRADUATE STUDIES (Faculty of Law) We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA December, 1996 , ©Alison L. Kirby, 1996 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of re-cu- ej LCJ^> The University of British Columbia Vancouver, Canada Date \> DE-6 (2/88) 11 ABSTRACT The Canadian payments system encompasses not only those traditional systems which facilitate the processing of paper payment instructions through the Automated Clearing and Settlement System (ACSS) and or the Bank of Canada but those electronic funds transfer (EFT) systems which are capable of processing payment instructions in purely electronic form. Access to the payments system is a key element in the retail and financial services sectors' bid to remain competitive on both national and global scales. Moreover, a complete system of electronic payments will eventually reduce the need for credit cards and, to the extent that it increases the use of deposits for payment purposes, it will reduce the need for currency and cheques as well.
    [Show full text]
  • Lynx Policy Framework Consultation Paper
    CONSULTATION LYNX POLICY FRAMEWORK SEPTEMBER 2019 Table of Contents Introduction .............................................................................................................................................................................. 3 Context & Considerations ......................................................................................................................................................... 3 Lynx Financial Risk Framework ................................................................................................................................................ 5 Proposals for the Lynx Policy Framework ................................................................................................................................. 5 1. Access ............................................................................................................................................................................ 5 a) Proposals .............................................................................................................................................................. 5 b) Considerations and Rationale ............................................................................................................................... 6 2. Finality of Payment to the Payee ..................................................................................................................................... 7 a) Proposals .............................................................................................................................................................
    [Show full text]
  • Bitcoin and Beyond: Current and Future Regulation of Virtual Currencies
    BITCOIN AND BEYOND: CURRENT AND FUTURE REGULATION OF VIRTUAL CURRENCIES JAMES GATTO* &ELSA S. BROEKER**** Bitcoin is a virtual currency transaction protocol. It also is a type of virtual currency. One of Bitcoin's unique features is that it is decentralized; it is not created or issued by a single person or entity. Rather, it is "mined" by miners that are issued bitcoins in exchange for solving complex math problems with special software. Bitcoins may be converted to government- issued legal tender (commonly referred to as fiat currency) or other types of virtual currency through an exchange, or they may be used to purchase goods and services from any of the tens of thousands of merchants who accept bitcoins for payment. The Bitcoin protocol enables the transfer of bitcoins and also can be used for other purposes, such as providing the infrastructure for smart contracts, escrow systems, smart property/title systems, and much more. Many other virtual currencies exist. Some are centralized virtual currencies that are created and issued by a single entity. Some of these virtual currencies may be converted to fiat currency, but others may not. Many are "closed loop" virtual currencies that may only be used to obtain goods and services of the issuer. Virtual currencies, such as Bitcoin, are not backed by a government entity or anything else. Such virtual currencies have value because they are a commonly accepted medium of exchange by a significant number of people. It is that acceptance that maintains their value. Other virtual currencies have intrinsic value because they represent a claim on a commodity, such as gold or silver.
    [Show full text]
  • Risks and Challenges Associated with Bitcoin Transaction Monitoring for AML Risk Advisory
    views August 2015 Risks and Challenges Associated with Bitcoin Transaction Monitoring for AML Risk Advisory Why does Bitcoin present such an emergent risk to law enforcement and AML monitoring? This paper aims to establish a background history of Bitcoin development, and provides the reader with an interpretation of the risks commonly associated with these transactions. Furthermore, this paper seeks to address some of the problems faced by the AML community when attempting to monitor these transactions. Finally, this paper seeks to highlight recent regulatory guideline revisions issued by Federal and International regulatory authorities. The use of Bitcoin initially garnered little international attention, environments, but does not have all the attributes of real but as the practice became more widespread, the value of currency. In particular, VC does not have legal tender status the electronic currency skyrocketed, thus making it a viable in any jurisdiction.”2 However, VC can be converted into legal resource to transfer large sums via anonymous networks. tender using a fiat currency exchange medium. “Bitcoin’s anonymity and irreversibility, make it susceptible to use in criminal transactions, including laundering money from A Brief History of Bitcoin illegal sales of drugs, firearms, weapons, and stolen personal The concept of Bitcoin was introduced in a paper published by 1 information.” By early 2014, Bitcoin was receiving a good Satoshi Nakamoto in October of 2008.3 He suggested that the bit of media attention. The very public collapse of the trading peer-to-peer transfer of funds via the internet was expensive, platform Mt. Gox in February 2014, helped to make Bitcoin a because banks, caught in the middle as mediators, needed household name.
    [Show full text]
  • Canadian Payment Methods and Trends: 2019 Author Notes
    2019 Canadian Payment Methods and Trends Canadian Payment Methods and Trends: 2019 Author Notes Michael Tompkins Lead, Policy and Research, Payments Canada [email protected] Viktoria Galociova Economist, Payments Canada [email protected] A number of organizations assisted Payments Canada by providing data and information, guidance on assumptions and feedback on this or past reports. Payments Canada would like to acknowledge the contributions provided by the following organizations: Bank of Canada INTERAC® INTRIA Symcor Technology Strategies International Euromonitor International RFi Group Leger Ipsos Canada The views expressed in this report are those of the authors and should not be attributed to the organizations named above. Payments Canada discussion papers concern a variety of issues relevant to the role of Payments Canada. The views expressed in this paper are those of the authors at the time of publication and do not necessarily represent those of Payments Canada. @paymentscanada Payments Canada © Payments Canada 2019 www.payments.ca ®Trade-mark of INTERAC Corp. ISSN 2369-3541 ii CONTENTS ii Author Notes 36 Appendix I: 1 Executive Summary 36 Detailed Payment Segment Charts 4 Payments from Coast to Coast 36 Figure A1: Total Annual CPMT Transactions 7 Introduction and Methodology (Volume and Value) 8 The Payments Landscape 36 Figure A2: All Payment Method 9 Findings Annual Totals 9 ACSS Data 37 Figure A3: Average Transaction Size 10 Overall Canadian Payment Transaction Trends 37 Figure A4: All Payment Method Average Annual 11 Year-over-year 2018 Growth Volume (10, 5 and 1 year CAGR) 12 The Payment Environments 38 Figure A5: Value (10, 5 and 1 year CAGR) 12 A.
    [Show full text]
  • Fundamentals of Payment Systems First Issued in 2014
    Fundamentals of Global Payment Systems and Practices www.treasuryalliance.com Welcome to the 2018 Edition of Fundamentals of Global Payment Systems and Practices. Payments are the lifeblood of any business - without the ability to pay and receive money there can be no be no business. They are Contents also a big business with industry revenues measured in the trillions of dollars and participants frequently entering and exiting Introduction 1 the market. Creative payments strategies are an opportunity to reach new customers Payment Systems 2 through mobile and other channels while Payment Channels 5 also achieving cost reductions. Payments also 1. Paper-Based Payments 6 represent a big source of risk from systems or counterparty failures as well as cybercrime 2. High-Value Transfers 7 and conventional fraud. 3. Batch EFT Systems 9 Treasury Alliance Group is pleased to present 4. Card Based Payments 11 this updated version of our Fundamentals of Payment Systems first issued in 2014. The Payment Processing and Controls 13 2018 edition has updated coverage on many elements of payments including fraud and Settlement 16 alternative payment systems. We hope that Alternative Payment Systems 18 you find this guide useful in learning more Summary 22 about payment systems around the world and some of the issues that surround pay- ments strategy. Treasury Alliance Group is here to help and provides consulting assistance in the areas of payments strategy, product development, security and risk reviews, network design and optimization, vendor selection and opera- tional best practices and internal controls. Contact us at [email protected] or by phone at +1 630-717-9728.
    [Show full text]
  • Comparison of Afghan Remittance Systems Senior Honors Thesis
    Comparison of Afghan Remittance Systems Senior Honors Thesis Presented in Partial Fulfillment of the Requirements for the Bachelor of Science in Business Administration Degree with Honors Research Distinction in the Fisher College of Business of The Ohio State University By: Nayan Rao The Ohio State University 2021 Rao 2 ABSTRACT In 2019 the Special Inspector General for Afghan Reconstruction noted that only 15% of Afghans have a bank account or use a mobile money provider. Nonetheless, Afghans continue to send and receive money from both domestic and international partners using services like Western Union (a U.S. based, international money transfer company), and the long-used, informal, Hawala system. This research examines and compares different payment/remittance systems available to Afghans. Specifically, this research uses factors derived from previous research to conduct a comparative analysis of several payment/remittance systems: Hawala, In Person Western Union Money Transfers, Traditional Banking Wire Transfers, and Bitcoin transfers. While several systems are used by Afghans, Hawala has historically enjoyed an advantage due to its community-developed trust. Even though Western Union transfers are reliable, faster, and trackable, formal identification requirements and corruption in Afghan Banks has resulted in distrust in, and limited use of, such established institutions. The research found trust to be the main factor that separates Hawala from alternatives and the comparisons lead to a recommendation that trust building through community relations is a central part of a successful framework for a legal, trusted, and reliable payment system. Rao 3 ACKNOWLEDGEMENTS I would like to thank my Research Advisor, Dr. Alam Payind, Director of the Middle East Studies Center at the Ohio State University for his mentorship and support throughout this entire process.
    [Show full text]
  • Digital Currencies and the Financing of Terrorism, 15 Rich
    Richmond Journal of Law and Technology Volume 15 | Issue 2 Article 2 2008 Digital Currencies And The inF ancing Of Terrorism William Hett Follow this and additional works at: http://scholarship.richmond.edu/jolt Part of the Banking and Finance Law Commons, Computer Law Commons, and the Internet Law Commons Recommended Citation William Hett, Digital Currencies And The Financing Of Terrorism, 15 Rich. J.L. & Tech 4 (2008). Available at: http://scholarship.richmond.edu/jolt/vol15/iss2/2 This Article is brought to you for free and open access by UR Scholarship Repository. It has been accepted for inclusion in Richmond Journal of Law and Technology by an authorized administrator of UR Scholarship Repository. For more information, please contact [email protected]. Richmond Journal of Law & Technology Volume XV, Issue 2 DIGITAL CURRENCIES AND THE FINANCING OF TERRORISM By: William Hett∗ Cite as: William Hett, Digital Currencies and the Financing of Terrorism, XV RICH. J.L. & TECH. 4 (2008), http://law.richmond.edu/jolt/v15i2/article4.pdf. I. INTRODUCTION [1] Informal money transfers present a significant challenge to combating the financing of terrorist organizations worldwide. Although the U.S. and other governments have implemented measures to restrict terrorist financing, these measures were designed to regulate formal financial institutions. Accordingly, those seeking to avoid detection have turned to other methods of transferring money, such as commodities trades, hawala,1 and digital currencies.2 Many terrorist operations do not require large sums of money, making the detection and prevention of even modest transfers important. For example, the September 11 Commission estimated the cost of carrying out the 1998 U.S.
    [Show full text]
  • Blockchains, Distributed Ledgers and Funds Transfer: an Overview
    REPORT | AUGUST 2017 Blockchains, Distributed Ledgers and Funds Transfer: An Overview REDUCING POVERTY THROUGH FINANCIAL SECTOR DEVELOPMENT 1 Key points 01 02 03 04 The volume of DLT can help to reduce There are two key ways Bitcoin, as all public DLT remittances is growing the cost of remittances, in which these can be applications, is essentially year by year but prices for increase speed of achieved: (i) the usage of a shared transactional international transfers settlement, reduce public DLT in general, database – in other words, are still relatively settlement risk, decrease and Bitcoin in particular, a shared accounting high. Blockchain and entry barriers for financial as a financial instrument system. The Bitcoin Distributed Ledger institutions, improve and (ii) use of the private application (as some Technology (DLT) the interoperability DLT as a means to clear other cryptocurrencies) presents opportunities for of different financial and settle obligations is focused in particular new ways of performing instruments and enhance between different on value transfers funds transfers, payment the regulatory frameworks financial institutions and thus constitutes settlement and regulatory that oversee funds either domestically or a publicly available oversight, due to its transfers such as Know internationally. payment system. There decentralised, replicated Your Customer (KYC) and are issues associated with and transparent nature. Anti-Money Laundering the scalability, volatility, (AML) processes. governance and legal standing of public
    [Show full text]