December 12, 2019

Ledgers to Bust Sanctions and Incumbents

Will distributed ledgers enable the private transfer of value and assets outside of traditional payments and custody platforms?

At SIBOS and FinTech Connect one of the recurring themes is payments and custody. As you browse the stands the words Payments crop up frequently (well they would at SIBOS) as do Custody.

Transferring value between parties is a similar process whether the underlying asset is cash, bonds, wine, cars, art or private securities. A distributed ledger is an ideal way for far-flung parties to participate in a network to transfer value with the benefit of encryption for privacy. I met with one firm at Fintech (Polymath) who wish to provide a platform for anyone to securitise an asset and make it tradable using a security token, and another at SIBOS (Bottomline) who provide payments infrastructure. We interviewed Daniel Bardini from Bottomline whilst at SIBOS which you can read here. Daniel made the point that for a payments infrastructure moving real cash, the link into the real-world means a provider must comply with political sanctions.

This lead to my thought that should someone want to move value globally and avoid sanctions a private distributed ledger would be ideal. It can be built and operated on simple hardware, it only needs a low bandwidth internet connection, and the settlement of value could take place by barter than cash settlement. Is this feasible? There are lots of firms selling payments technology, but enterprising programmers could create something from scratch I would think.

And meanwhile the arrival of new ways to operate custody such as Koine bring a whole new infrastructure to digital assets, which (in theory) be used for traditional assets too. Has anyone heard of moves by the large ICSDs into the digital asset and ledger space? Let me know if so.

Photo by Kyle Glenn on Unsplash

Most Viewed


Related Articles

June 30, 2022

SIMM Falls Short says PRA Letter to Banks


Risk Management

June 28, 2022

FMSB Statement of Good Practice on Trading Platform Disclosures



June 20, 2022

Regulatory change and data fragmentation are key challenges for 85% of firms