Bitcoin Global News (BGN)
May 3, 2019 -- ADVFN Crypto NewsWire -- In 2016 the central
bank of Canada and Singapore both began developing digital ledger
technology using two different platforms for their experimentation.
The Canadian platform, Jasper was built using the Corda network,
and Singapore’s Ubin is built on the Quorum network, which was
developed by JP Morgan Chase Bank. The two have been working on
methods for increasing cross-border payments using the technology,
and most notably, in such situations like their own, where there
are two different networks at work. They recently published an
extensive report detailing the background for the projects, their
current evaluations, and the potential for future
development.
“A fragmented world, with differing
standards, processes, norms, and regulations is the key challenge
in cross-border payments today. DLT could offer an easier and
faster path towards adoption than a centralized approach because it
can leave the different jurisdictions involved in control of their
portion of the network while allowing for tight integration with
the rest of the network.” - Jasper - Ubin Design Paper (http://www.mas.gov.sg/~/media/ProjectUbin/Jasper%20Ubin%20Design%20Paper.pdf)
Interest in digital ledger
technology, blockchain technology and cryptocurrencies has been
steadily growing amongst global financial institutions. The epitome
of this technology is that it creates a trustless environment that
is dictated by predetermined contracts that are enacted and
enforced without human intervention.
In the report, the two successfully
complete a cross-border facilitated by tokenized central bank
digital currencies. In the traditional process, such payments
require some form of intermediary. This not only brings higher fees
for the transactions, but increases the time necessary to settle
them. The report addresses this situation as well, outlining
methods to introduce digital ledger technology in ways that would
increase efficiency while maintaining the “middleman.”
Interestingly, it was only in March
that Agustin Carstens, General Manager Bank of International
Settlements, spoke at the International Bank of Ireland, claiming
that there is truly no need, desire, or benefit to the public of
introducing such technologies:
“There are historical instances of
one-tier systems where the central bank did everything. In the
socialist economies before the fall of the Berlin Wall, the central
bank was also the commercial bank. But I do not think we can hold
up that system as something that will serve customers better.” -
Agustin Carstens
He certainly brings up a vital
point to maintaining a fee economy, however a one-tier system is
not exactly what is created by using the methods that the central
banks of Canada and Singapore are experimenting with. Rather than
removing the tier, these technologies are automating the tier in a
situation where two or more banks are mutually agreeing to trust
the coded system in place to fairly fulfill their transactions.
Essentially, the primary tasks of the Bank of International
Settlements would become computer systems, rather than a global
business entity.
By: BGN Editorial Staff