Blockchain Breakthrough as Industry Leaders Collaborate
24 August 2016
"The use of digital currencies, or tokens, for the settlement of the cash leg of transactions is a key step in the journey towards establishing the infrastructure that will enable blockchain technology to deliver useful applications in clearing and settlement systems.
There is clearly intense interest in the potential application of blockchain technology to clearing and settlement arrangements, with multiple prizes at stake, including better and more consistent capture and dissemination of transaction data, simplified transaction reporting and, potentially, faster settlement cycles for securities trades and reduction of counterparty risk.
But clearing is complex, with many different aspects and uses. If title to an asset is to be transferred using a blockchain system, it is also important to have a system for the transfer of any corresponding cash payment for that asset; otherwise any benefits in reducing counterparty risk from the blockchain will be imperfectly realised."