This is a very complex paper from Meher Roy of Hyperledger…a biochemical engineer based out of Basel Switzerland (The headquarters of the BIS Central Bank system) (H/T Tradewithdave)
Introduction
Satoshi Nakamoto’s great invention of Bitcoin can be appreciated as having 2 distinguishing features:
- Bitcoin is a public decentralized cryptographic ledger with basic ledger contracting capabilities.
- The cryptographic ledger tracks balances of a new currency bitcoin.
Effort has been directed towards architecting a parallel financial system with bitcoin the currency as a base layer. The driving force are flexibility benefits of cryptographic ledgers enabling new use cases like Multi-signature accounts, Decentralized exchange, Machine to machine transactions etc.
This paper analyzes applications of cryptographic ledgers in the current financial system and aims to stimulate the discussion:
What are the speed, cost and flexibility advantages that can be realized if financial institutions tracked asset and liability balances utilizing public decentralized cryptographic ledgers with basic ledger contracting capabilities?
Such ledgers enable new ways to build Real Time Gross Settlement systems like CHAPS and FedWire; Deferred Net Settlement systems resembling ACH, Bacs and correspondent banking; foreign exchange markets; stock exchanges and other pillars of the financial system. This article encapsulates these disparate elements into a coherent layer based framework christened “The Internet of Money”.
Perceived benefits from the Internet of Money will be enumerated along with system descriptions.
These benefits form the motive for the proposal.