Is the blockchain ready to meet Fiat? Why are banks so bullish on crypto currencies? __ Block Chain

The central bank will soon see a wave of technological breakthroughs, that is, if the newest members of the utility settlement coin (USC) project have anything to say.

The use of secured cryptographic tokens is designed to minimize the role of clearing houses by allowing financial institutions to trade directly with each other, but this work can have a broad impact. Since the collateral associated with these tokens will be held by the central bank, the project is gradually being seen as a step towards redefining how the currency is issued.

According to several members of the coalition, the potential for improvement is far greater than the trading speed of the transaction, as the corresponding risk is lower.

They believe that if the assets and the money used to pay are distributed in the form of blockchain, new financial products may be produced.

Lee Braine of Barclays Investment bank told CoinDesk:

"By focusing on the new digital currencies associated with major Fiat, utility settlement investment projects may create new asset-backed controlled digital cash instruments in Distributed ledger technology. ”

Responding to Braine's passion is the Banco Santander,julio Faura's blockchain research and development leader.

In an interview with CoinDesk, Faura highlighted the benefits in another way, emphasizing the power of using distributed books to run encrypted automated protocols:

"The legal agreement to set up a central bank currency in a smart contract is a very good idea for financial institutions to conduct global transactions," he said. " Eliminate Risk

The central bank's idea of a blockchain Fiat has also drawn the attention of Aymando, the head of Credit Suisse's distributed books and blockchain program, Emanuel Aidoo, who says the impact of the change is far-reaching.

Aidoo said he was concerned about USC for 18 months and concluded that his bank involvement was a good time. In fact, he believes the project could affect financial stability on the largest economic scale, and is more determined by his determination to "fuel the Flames".

He told CoinDesk:

"USC applications are beyond the scope of payment and can ultimately optimize profitability and mortgage debt efficiency and reduce system risk." ”

Central banks around the world have begun to study how blockchain technology can play a role in a wide range of applications.

The core of this large-scale, diversified engagement is to minimize the risk between the participants in the agreement.

For example, at present, there is considerable risk in the delivery process, known as "payment delivery", which is designed to ensure that securities are fluctuating at close proximity to delivery, minimizing losses due to sudden price changes.

Swen Werner, a new USC member, a digital product manager for Cash solutions at State Street bank, said: "Ensuring that the settlement of financial instruments follows a rigorous delivery payment process is critical to the success of the industry and distributed book solutions."

Similarly, HSBC's financing technology partnership and strategy leader, Kaushalya Somasundaram, also explains how the solution was developed with the help of a blockchain startup Project Clearmatics, which can help reduce the number of risks that occur in a transaction.

"It would be more efficient to link the digital currency with the collateral of the central bank and to transfer the digital currency," she says. "Make sure that cash tokens occur immediately on all items in the transaction, instead of sequentially executing each item multiple times." " Driving interactivity

Currently, the USC platform is designed so that the value of tokens comes from the collateral stored by the central bank's utility clearing coins, but the use of the platform itself does not depend on whether the central bank uses it.

However, as with other distributed book technologies, the larger the number of participants, the stronger the solution. Hyder Jaffrey, head of strategic investment and financial technology innovation at UBS, said risk factors increased in each transaction based on blockchain assets and centralized assets, greatly reducing the potential benefits of some implementations.

To minimize these vulnerabilities, Jaffrey and many USC members think it is critical to issue fiat on the blockchain. To increase adoption opportunities, some members indicated that their goal was to engage directly with the central bank using their membership.

"The breadth of [central bank currency] is really needed in order to realize the potential of distributed books," he said. ”

Nonetheless, he was cautious to say:

"Time will give an answer." ”

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