Bank of Canada finds flaws with current blockchain solutions – The Register

Underpinning wholesale payment systems with distributed ledger technology (DLT) would introduce greater costs and risks for institutions than those which apply under existing wholesale payment systems, the Bank of Canada has said.

However, a study carried out by the Bank of Canada, into the feasibility of using DLT to create new distributed wholesale payment systems, identified potential for DLT-based wholesale payment systems to deliver benefits if they could be linked in to other financial market infrastructure.

“Such benefits may be obtained by integrating other assets on the same ledger as payments – which could greatly simplify collateral pledging and asset sales – reaping economies of scope and reducing costs to participants by integrating back-office systems,” the Bank of Canada said (11-page / 182KB PDF) in a report on its study.

Benefits from the “interaction” between DLT-based wholesale payment systems and other infrastructure include “possible sector-wide” cost savings or efficiency gains, as well as shortened time for settling trades of some financial assets, such as stocks, bonds and derivatives, the report said.

More at: Bank of Canada finds flaws with current blockchain solutions – The Register

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