Blockchain Technology Adoption - September 2017 - Cofina Eventos
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Blockchain Technology
Adoption
September 2017
INDEX
1. Adoption of DLT in the Financial Sector
2. Payments Settlement: Present & Future
2
Adoption of DLT
3
From the Internet of Information…
Timeline
TCP/IP Apple is founded HTTP and the Amazon is Rakuten is Alibaba is
Vince Cerf and Bob World Wide Web founded founded founded
Kahn create the are created by Tim
Internet Protocol Berners Lee
1950s 1974 1975 1976 1988 1989 1993 1994 1995 1997 1998 1999 2004
Google,
Mosaic Tencent and
First Mainframe NTT DATA is web browser is Ebay is PayPal are Facebook
computers Microsoft is born founded created founded created is founded
The emergence of the Internet of Information in the 90s was possible thanks to the creation of the Internet Protocols (TCP/IP, HTTP,
SMTP…).
Internet Protocols enabled open innovation to flourish. Companies like Amazon, Ebay, Rakuten, Google and Alibaba were born
once Internet Protocols gained adoption.
Today information moves seamlessly over the Internet, and due to its open and neutral nature, the Internet has given raise to all
types of products and services that were previously unimaginable.
4…to the Internet of Value
Timeline
Ripple is born Interledger (ILP) is invented Ripple becomes the standard for international Blockchains and Distributed
(first currency Ethereum is born money transfers between banks Ledger solutions mature, and
agnostic blockchain) Hyperledger is created ILP becomes the standard protocol for connecting all asset exchange networks
banks’ cash ledgers (as part of Ripple’s software) become interoperable with ILP
2009 2012 2014 2015 2016 2017-2020 2020-2025 2025-2030
Blockchain solutions for Capital Markets and Trade
Finance emerge (R3 Corda, DAH, Fabric, etc.)
Bitcoin is invented R3 Consortium SBI Ripple Asia (Japan) is born ILP Java becomes the interoperability standard for
(first blockchain) is born First DLT banking network (Ripple GPSG) Hyperledger Foundation projects
The Internet of Value will make for money and other forms of value what the Internet did for information.
Analogous to the Internet of Information, the Internet of Value needs open protocols and standards to enable the many value
networks in the world to connect with one another and become interoperable.
As banks and other financial institutions adopt open standards like Interledger (ILP) to connect between each other and with
Blockchain networks, we’ll see the Internet of Value emerge.
Blockchain technology and smart contracts will enable programmable money and frictionless transfers of digital assets, lowering
the cost to transact and giving rise to seamless transactions between people, institutions and the IoT.
5Blockchain & DLT
Adoption and Maturity
Technology Breakthrough Maturity and Adoption
Experimental platforms Enterprise-level platforms for specific use cases
Blockchain Technology Cross-Border Payments Capital Markets
Testing the use of Meeting the rising Automating
crypto currencies and demand for faster, reconciliation to speed
smart contracts more cost-efficient up post-trade services
international payments
Trade Finance
Pushing the
digitalisation of trade to
reduce risk and fraud
FABRIC
t
6Interledger Protocol
HTTP SPSP
Application Layer
SMTP HTTP-ILP
VoIP PayTorrent
Transport Layer TCP PSK
Interledger
UDP IPR
Stack
Internet Interledger
Core Layer
Protocol Protocol
Network Layer
Information Value
7Hyperledger Foundation
Members
For the advancement of Blockchain Open Standards
The Linux Foundation leads the biggest Consortium of
Technology Companies and Financial Institutions
collaborating to establish DLT and Blockchain
technology standards.
NTT DATA is a member of Hyperledger, and as such
we aim to become the best technology partner for
Hyperledger member companies, who are working to
adopt blockchain and distributed ledger based
solutions.
With this objective we are working on the
development of the Interledger Java software, which
will facilitate transaction interoperability across banks,
And more
settlement networks and platforms.
8Payments Settlement
Present and Future
9Cross-Border Real-Time Gross Settlement
1980-2017
Local Payments RTGS Systems Correspondent Banks (CB) RTGS systems reduce systemic risks by
removing the settlement risk from interbank
ZENGIN BOJ - NET CLS payment flows
RTGS Systems today operate in daily batch
process cycles
SEPA TARGET 2 CLS
RTGS systems don’t provide real-time
settlement capability
CLS RTGS systems’ access is restricted to local
ACH FEDWIRE
banks in each country
Consequently, correspondent banks are
needed to access foreign currency corridors
CLS
FPS BACS / CHAPS and liquidity pools
Correspondent banks work in oligopolistic
markets and use antiquated technology to
HVPS / BEPS CDFCPS / CFETX settle transactions across countries. For these
reasons, international transactions are
expensive, slow and error prone
CLS – Continuous Link Settlement, Old, slow and expensive Infrastructure used by Correspondent Banks 10Banks’ Adoption of Real-Time Settlement DLT
2017
Local Payments RTGS Systems CB & LP 50 Japanese Banks are currently integrating with
RippleNet through xCurrent to make real-time
ZENGIN BOJ - NET ILP payments (including Mizuho, Bank of Tokyo
Mitsubishi and Resona)
xCurrent uses the Interledger Protocol (ILP) for
SEPA TARGET 2 ILP making transactions across banks’ ledgers
All over the world many other financial institutions
are also joining RippleNet to make interbank local
ILP and international payments
ACH FEDWIRE
As banks accelerate the RippleNet adoption
worldwide, financial institutions will start using the
ILP
XRP Ledger for liquidity provisioning and cross-
FPS BACS / CHAPS currency Global RTGS
Aware of the fast changing financial landscape,
Everis and NTT DATA are developing Interledger
ILP
HVPS / BEPS CDFCPS / CFETX Java, an implementation of the Interledger
Protocol, to facilitate real-time settlement of
transactions across banks, payment systems and
Capital Market platforms
Ripple Solution: Payments Software that banks integrate to settle funds in real-time with other banks DLT: Distributed Ledger Technology 11Cross-Border Real-Time Gross Settlement
2020-2025
Local Payments RTGS Systems Global RTGS CB & LP The Global RTGS will remove friction, costs and
risks from cross-currency transactions
ZENGIN BOJ - NET ILP
Distributed ledger technology, and in particular
the XRP Ledger, will enable banks to settle cross-
currency transactions in real-time (something
SEPA TARGET 2 ILP impossible today)
The XRP Ledger can be accessed by all banks
and liquidity providers, enabling healthy
ILP XRP ILP competition between banks and a better service
ACH FEDWIRE Ledger for customers
Correspondent banks and liquidity providers will
be able to reach more currency corridors and
ILP
FPS BACS / CHAPS new customers, improving their service offering for
other banks and their clients
The Interledger Protocol (ILP) will enable financial
ILP
HVPS / BEPS CDFCPS / CFETX institutions and central banks to make their
existing infrastructure and processes interoperable
with other currencies, asset classes and the XRP
Ledger, the global liquidity marketplace and the
Global decentralised RTGS system
XRP Ledger – Modern Distributed Ledger based Global RTGS system and liquidity marketplace CB & LP – Correspondent Banks & Liquidity Providers 12Interledger : Enabling Interoperability Across Platforms
2020-2025
Money Networks Platforms
ZENGIN BOJ - NET ILP
Blockchains
& DLTs
Fabric
Capital
Markets
SEPA TARGET 2 ILP
Trade
Finance
ILP XRP ILP ILP Internet of
ACH FEDWIRE Ledger Things
Payment
Platforms
FPS BACS / CHAPS ILP
Marketplaces
Other
HVPS / BEPS CDFCPS / CFETX ILP Platforms
13everis.com
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