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Kathleen Breitman at the Hyperledger Meetup

Use cases for blockchain in Finance

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Kathleen Breitman at the Hyperledger Meetup

  1. 1. R3 Hyperledger Meet Up Kathleen Breitman, Strategy Associate @breitwoman
  2. 2. R3
  3. 3. R3 Benefits of Distributed Ledgers in Capital Markets Distributed ledgers are records of consensus with a cryptographic audit trail maintained and validated by many separate nodes. They are good for keeping track of things, including very complex things. Though this outcome could be achieved with properly designed databases, by being distributed the ledger offers a crucial advantage: no political battle over who controls what. In banks, this is usually the job of a back office. For a variety of reasons, most back offices comprise of fragile, old software which must be reconciled against the records of various counterparties and parts of the bank. The lag in reconciling these records yields balance sheet risk and the siloed nature of these systems increases the odds of manual error. A swap with multiple parties that’s been sold and resold and moved between custodians could be a nightmare for a back office but it would be a walk in the park for a distributed ledger maintained between the different players. t+x
  4. 4. R3 Use Cases Looking at financial services, use cases typically fall into archetypes with these characteristics o A lack of existing centralized authority  Either the ledger will agree with the existing authority – in which case it’s superfluous – or it will disagree with the existing authority – in which case it’s moot o Robust regulatory requirements  Distributed ledgers create audit trails of transactions with a timestamp. This helps regulators understand how and when transactions came to pass o Transactional processes  Assessing complex issues like conflicts of interest are beyond the scope of the technology. However, transactional agreements that follow processes are typically good candidates High Level Example: Repo Agreements
  5. 5. R3 • FX Settlement • Trade reconciliations • Transparent Valuations • Cross Border Payments • Credit Efficiency • Loan Settlement • OTC Derivatives Clearing • Collateral Management • Client Onboarding • Intracompany Settlement • Normalize reference data • Timestamping • Account Portability • Broker Fraud Identification • Securities Agreements as Smart contracts • Crowdfunding • Virtual Identity • Credit Scoring • Cross Border Remittance • Vault/Escrow Services • Customer Deposit Cost • Peer-to-Peer Lending • Compliance Reporting • Risk Visualization • Basel III Compliance • Client Fund Transparency • Know Your Customer / Anti-Money Laundering • Trade reporting Example Use Cases by Function Financial Institutions Regulators Operations Individuals
  6. 6. R3 To Be Clear
  7. 7. R3 Questions?

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  • jorges

    Jun. 1, 2020

Use cases for blockchain in Finance


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