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From YouTube: Capital Markets SIG FEB 10 2021 : Decentralized Clearing: dFMI To Ease The Woes Of Robinhood
Description
Capital Markets SIG FEB10 : Decentralized Clearing: dFMI To Ease The Woes Of Robinhood
Decentralized Clearing: dFMI To Ease The Woes Of Robinhood
Mani Pillai CEO otc.Digital
&
Vipin Bharathan Principal dlt.nyc
Presenting an overview of today's clearing solutions. How volatility and settlement delay contribute to friction and inefficiencies in the market, disadvantaging retail investors. The Robinhood GME saga is used to illustrate the weaknesses. How dFMI (decentralized Financial Market Infrastructure) can solve the problem. Towards a 24/7 market and the case for ad-hoc settlement. otc.Digital will also talk about the dFMI solution they are working on.
Get involved with the Capital Markets SIG: https://wiki.hyperledger.org/display/CMSIG/Capital+Markets+SIG
----
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A
So
the
agenda
is
very
clear:
pardon
the
pun,
clearing
as
it
exists
today,
scale
and
scope
of
clearing
and
the
challenges
and
the
proposed
solutions
and
some
anatomy
of
a
use
case,
and
then
the
solution
which
will
be
presented
by
money-
and
we
are
not
talking
about
some
pie
in
the
sky
stuff
here.
Money
is
actually
building
stuff
and
he's
almost
you
know,
40
to
80.
I
mean
about
80
complete
with
that,
so
we
are
not
in
discussion
or
poc
stages.
A
A
Can
you
hear
me
yeah
yeah?
Is
it
clear?
Okay,
because
I
just
got
a
message
saying
my
internet
connection
is
unstable,
so
we're
going
through
all
kinds
of
problems.
Messages.
Of
course
messages
consist
of
electronic
messages,
acknowledgements
everybody
maintains
their
own
infrastructure
and
so
on,
and
the
payments,
and
so
the
first,
a
b
c
and
d
ml.
A
It
addresses
one
of
the
major
problems
with
rtgs.
Rtgs
is
immediate
settlement,
so,
if
you're
doing
bilateral
settlement
immediately,
all
the
time,
the
liquidity,
it
is,
the
safest
form,
meaning
you've
traded,
you've
settled
gone,
but
the
liquidity
needs.
The
liquidity,
which
is
the
most
one
of
the
most
important
parameters
for
survivability,
is
highest
in
rtgs.
A
That
means
in
deferred,
netting
and
settlement,
for
example,
in
in
dtcc,
about
200
million
transactions
per
day,
are
netted
down
to
1
million
transactions
per
day.
So
that
means
it
is
going
to
be
just
about
0.5
of
the
transactions
I
mean
in
terms
of
raw
volume.
It
reduces
to
that.
That
means
all
of
the
opposing
trades
are
cancelled,
or
you
know
netted
together,
and
then
you
get
to
a
point
where
you
only
have
to
do
1
million
transactions
per
day,
but
it
introduces
another
risk
which
is
because
of
the
delay.
B
A
So
the
ccp,
which
is
a
central
counterparty,
is
a
buyer
to
every
seller
and
seller
to
every
buyer,
which
means
they
are
interposing
themselves
between
the
buyer
and
the
seller,
and
it
is
done
legally
through
ucc
and
through
the
fact
that
they
maintain
the
books
and
they
can
just
do
a
book
transfer.
So
no
physical
transfer
of
anything
it
is
all
maintained
in
a
dematerialized
form.
That
means
it
is
not
no
longer
paper
certificates
or
anything
like
that.
A
A
A
That
is
the
that's.
That's
what
happened
so
even
though
you're
settling
in
two
days
time,
they
keep
ddcc,
keeps
a
tally,
a
running
tally
of
what
your
exposure
is,
and
if
your
exposure
rises,
suddenly
any
dealer
or
a
counterparty
has
to
post
extra
collateral
anyway.
So
the
diagram
below
exhibits.
What
is
there?
Basically,
everybody
interacts
through
the
financial
market
infrastructure
fmia
here,
which
is,
which
is
basically
the
central
counterparty.
A
A
So
what
are
the
challenges
we
als?
We
already
kind
of
went
through
some
of
them,
but
the
longer
the
settlement
cycle
and
delay
increases
the
risk.
Obviously,
it
also
increases
the
compression
that
means
that,
like,
for
example,
200
to
1
compression
you
are
able
to
get
by
netting
if
we
were
to
increase
the
settlement
cycle
to
one
month,
which
used
to
be
the
case
before.
A
The
netting
site
netting
increases,
I
mean
the
netting
efficiency
increases
a
lot.
Obviously
you
cannot
have
24
7
trading
because
you
have
to
pause
for
the
deferred
net
settlement.
You
have
to
pause
all
activity
so
that
everything
can
be
tallied
up,
totaled
up
and
netted.
In
order
to
do
this,
so
you
cannot
have
24
7
trading.
A
Two
days
you
know
things
are
in
flight
and
plus
because
of
omnibus
accounting,
omnibus
accounting,
meaning
nobody
owns.
These
shares,
except
the
dtcc
dtcc
is
the
omnibus
account
we
only
have
at
you
know
at
a
distance
claims
to
what
is
on
the
omnibus
account
so
dtcc
I
mean
I'm
using
dtc
as
an
example.
A
A
A
Square
is
the
value
of
securities.
Health
in
the
middle
is
the
value
of
the
delivery
instructions,
which
is
the
flow
through
the
system.
So
you
can
see
it's
80
trillion
dollars
held
by
the
fedwire
security
services
in
the
u.s,
and
that
is
mostly
because
of
government
securities,
treasuries,
gsc's
and
so
on.
A
A
The
value
of
securities
held,
is
how
much
is
held
on
an
average
day
during
the
year.
So
you
can
see
these
ccps
handle
enormous
enormous
quantities
of
money.
I
mean
assets
worth
enormous
quantities
of
money
daily
flow
through
dtc
is
in
the
order
of
you
know,
the
transfer,
200
million
transactions
is
somewhere
around
three
times
gdp
just
a
single
day,
so
they
are
obviously
very
important
and
centralized
points
of
failure
in
the
system
next
slide.
Please-
and
with
this
I
pass
on
you
know
after
the
next
slide.
A
This
is
calls
for
change
due
to
what
happened
in
in
robin
hood,
which
stopped
trading
and
stopped
this
short
squeeze
of
gme
by
stopping
buying
of
securities,
but
not
the
selling,
and
this
is
due
to
intermedia
intraday
margin
calls
and,
as
the
system
is
designed
to
work
from
dtc
to
robinhood,
they
had
to
come
up
with
one
and
a
half
billion
dollars
just
like
that,
otherwise
they
would
not
be
allowed.
They
would
be
cut
off
so
anyway.
Now
I
gave
over
to
money.
A
A
B
All
right,
maybe
you
know
we
can
take
up
the
questions
and
I'll
try
to
make
it
everything
short.
So
we
at
otc
digital
has
been.
You
know
at
this
problem
of
bringing
decentralization
to
institutional
digital
asset
space.
I've
been
working
on
for
the
past
few
years,
working
towards
standards.
You
know
looking
at
the
processes
and
how
this
whole
process
can
be
the
risk
that
is
now
concentrated
on
in
you
know
on
a
single
entity
how
they
could
be
mitigated.
B
B
Maybe
alleviates
or
reduces
the
risk,
and
you
know
let's
go
through
that,
and
you
know
I'm
going
to
use
a
you
know
a
recent
article,
a
white
paper
from
northern
trust
that
have
given
and
had
indicated
what
is
the
current
equity
market
structure
to
the
left
and
what
they
expect
to
be
the
new
ecosystem
in
2030.
Although
you
know
that
looks
too
too
futuristic,
we
think
that
the
infrastructure
that
are
necessary
for
all
the
blockchain
or
or
a
decentralized
network
are
already
there
in,
and
you
would
start
seeing
some
solutions
in
2021..
B
I
don't
want
to
go
through
too
much
into
this
process.
I
ripping
has
already
gone
through
with
all
the
intermediaries
and
why
it
takes.
You
know
days
to
settle
trades.
You
know
this
is
something
that
is
being
a
legacy,
and
everyone
wants
to
keep
their
own
pie
and
their
own
grip
on
the
market
infrastructure,
and
that's
why
it's
harder
to
transform.
B
Whereas
you
know
what
the
market
is
envisioning
or
looking
forward
is
something
of
a
ledger
based
solution
where
it
can
be
decentralized
to
a
large
extent
and
the
chances
of
failure
or
a
single
point.
Failure
are,
you
know,
are
very,
very
low
in
the
new
market
structure,
the
most
of
the
infrastructure
that
are
required
are
already.
You
know,
a
lot
of
the
blockchains.
Today's
world
are
already
addressing
the
core
needs
of
the
system.
B
Now
the
regulators
have,
you
know
clearly
distinguished
between
crypto
assets,
you
know,
and
and
securities
transactions
or
securities
management.
In
the
sense
that
they,
they
have
a
very
clear
prescription
of
the
ownership
and
know
your
you
know,
kyc
aml
requirements
and
how
settlement
must
be
final
and
between
and
parties
have
acknowledged.
B
There's
a
whole
host
of
you
know,
clarification
statements
from
scc,
cftc
and
you
know,
and
even
other
regulators
worldwide
had
given
their
inputs
on
it
so
based
on
which
there
are
a
lot
of
blockchain
about
the
custom.
Blockchains
are
now
emerging
that
addresses
the
specific
requirements
for
securities
processing.
B
B
You
could
see
that
this
is
the
other,
completely
decentralized
in
a
sense,
but
still
a
lot
of
intermediaries.
Holding
the
market
structure-
and
you
know
are
essentially
are
you
know,
having
a
hold
of
the
infrastructure
and
a
lot
of
the
market
structure
actually
evolved
based
upon
the
2008
market
reforms,
things
like
credit
hubs
and
execution
venues.
B
Markets
are
acting
as
an
intermediary
to
provide
trade
confirmation.
A
lot
have
evolved
over
the
past,
I
would
say
10
12
years,
and
the
most
important
thing
is
of
all
is
the
ccps
and
the
sdrs
which
are
you
know,
the
deposit
which
which
keeps
track
of
all
the
trades
and
in
derivatives
market
is
much
much
more
complex.
B
The
concept
is
the
same.
Where
you
have
ccps,
everybody
is
facing
a
ccp
in
a
cleared.
You
know
in
a
clear
context
for
derivatives,
but
the
mechanisms
are
a
lot
more
complex
and
again
these
screens
for
another
area
where
this
inflation
can
help,
but
it's
a
longer
process
and
and
then
to
an
extent.
Some
of
these
post-trade
processes
are
already
being
addressed
through
blockchains,
for
example,
axony
has
done
some
work
on
in
this
area
for
equity
swaps
and
they're.
B
This
is
maybe
a
very
simple
example,
but
to
highlight
the
fact
that
two
parties
trade
a
bunch
of
trades,
I'm
not
going
to
go
to
the
details,
but
to
give
an
idea
if
a
ccp
is
sitting
in
between
these
two
parties
and
we
use
a
deferred
netting
at
the
end
of
the
day,
you
would
net
all
the
trades
and
each
party
would
settle
the
trades
against
the
ccp
and
you
know,
then
they
move
on
to
the
next
space
trades.
The
this
process
has
been
happening.
B
B
This
just
shows
what
happens
when
you
are
holding
and
you
know
doing
a
deferred
netting
based
upon
a
predefined
word
t
plus
one
t
plus
two
because
of
the
fact
that
these
cash
not
sell.
For
you
know
in
a
couple
of
days,
the
credit
that
is
building
up
in
the
system
is
quite
comprehensive
and
it
can
really
exasperate
the
overall
market
risk.
That's
what
you
want
to
show
and
in
the
interesting
way
of
solving
this
problem.
B
Again,
it's
another
example:
I'm
showing
you
is
what
could
happen
in
a
decentralized
clearing
between
these
two
parties.
The
critical
point
here
is:
that
is
still
they
go
through
the
netting
exercise
and
they're
settling,
but
the
settlement
can
be
set
up
in
such
a
way
that
two
parties
decide
how
frequently
they
want
to
settle.
So
this
settlement
can
happen
every
eight
hours
every
day
it's
up
to
the
parties
and
they
could
decide
based
upon
their
credit
profile
against
each
other.
B
If
parties
two
parties
decide,
you
know,
and
every
eight
hours
they're
going
to
settle
their
records
against
each
other,
they
could
be
completing
their
settlement
in
a
matter
of
minutes
and
their
credit
exposure
to
each
other.
Is
you
know
back
to
zero,
it's
a
very
simple,
again
exp
and
an
example
of
a
decentralized
clearing,
and
this
is
something
that
we
have
been
building
the
infrastructure
for
this.
For
the
past,
I
would
say
three
years,
plus
a
lot
of
it
to
do
with
digital
data
standards.
B
The
challenge
today
I'll
jump
into
the
next
slide,
to
show
you
between
all
the
different
aspects
of
centralized
market
structure
versus
a
decentralized
but
a
regulated
market
structure
is
the
we
we
touched
upon
the
settlement
duration
again
operational
time
this.
This
is
where
it
enables
us
to
go
24x7
in
a
decentralized
infrastructure.
B
The
centralized
market
infrastructure,
one
of
the
one
of
the
classic,
while
they
do
provide
a
large
amount
of
netting
and
settlement,
they
go
by
asset
classes.
So
that
means,
if
you
take
an
example
of
a
dtcc,
they
have
a
separate
infrastructure
or
a
legal
entity
to
handle
equity
separate
one
for
fixed
income.
Separate
for
derivatives,
but
in
a
in
a
decentralized
fashion,
two
parties
can
decide
subjective
regulation
what
other,
what
asset
classes
they
want
to
engage
in
and
knitting
and
settlement.
B
You
could,
since
the
session
timing
is,
let's
say,
four
hours-
eight
hours,
whatever,
whatever
the
defined
timing
is,
they
could
actually
settle
the
whole
trade
somewhere
between
the
buy,
sell
and
sell
side
and
then
kick
off
the
next
session
of
trading
that
which
means
the
credit
utilization
is
much
higher
at
the
expense
of
a
little
bit
of
more
higher
liquidity,
and
this
is
always
going
to
be
a
balancing
act
between
you
know,
reducing
your
credit
risk.
At
the
same
time,
you
know
slightly
increasing
your
liquidity
exposure.
B
B
The
the
other
interesting
point
which
we
kind
of
ignore
is
the
security.
This
is
a
single
point
of
failure,
given
the
fact
that
there
are
state
actors,
you
know
really
going
after
market
infrastructure
or
nationals.
You
know
power
electric
infrastructures
today,
what
stops
them
from
going
after
and
disrupting,
is
you
know
a
single
ccp
from
operating?
Imagine
the
scenario:
what
happens
if,
if
there
is
a
hack
into
one
of
the
ccps,
what
kind
of
a
market
infrastructure
disruption
that
would
happen?
B
That's
something
that
a
decentralized
marketplace
can
take
care,
and
then
you
know
and
then
reduce
that
big
risk
that
that's
something
that
we
don't
see
it
until
really
when
it
happens,
and
it
happens,
it
becomes
a
you
know.
We
market
structure
will
start.
Regulators
will
start
simply
saying
why
not
we
go
to
decentralization.
That's
my
prediction
that
you
know.
We
don't
want
it
to
happen,
but
we
can't
keep
it.
We
can't
keep
praying
that
it
would
never
happen.
So
that's
something
very
important
to
keep
track
of
settlement
currencies.
B
Every
ccp
uses
a
national
currency
to
settle
here.
You
have,
the
parties
can
choose.
Any
combination
of
you
know
stable
fiat
cbdc
whenever
that
appear.
Whenever
that
occurs,
and
also,
interestingly
enough,
you
don't
need
a
currency
to
settle,
because
if
you
really
look
at
the
crypto
world,
it
could
be
a
token.
I
call
them
a
token
star
versus
token
star
is
a
bunch
of
tokens
being
exchanged
between
two
parties
and
the
tokens
may
not
be
any
of
the
cbdc's
because
of
the
trades
involved.
B
B
You
know
erc20
or
you
know,
erc
xyz
token
implementations
where
the
address
is
is
is,
is
you
know,
you
do
not
know
the
party
behind
the
address,
but
the
quantity
and
the
amounts
are
very
visible,
which
means,
through
you
know,
crypto
forensics.
You
can
really
find
out
who
the
person
is.
Then
you
are
completely
exposed
in
terms
of
your
holdings
in
in
the
current
market
structure,
whereas
in
the
emerging
digital
asset
or
more
securities
market
structure,
these
things
are
completely
encrypted.
B
The
parties
themselves,
depending
upon
who
are
collaborating
on,
for
example,
an
investor
working
with
a
a
broker
dealer
and
a
custodian,
a
custodian
in
this
case
and
an
administrator
may
give
only
certain
permissions
to
operate
on
all
the
assets
that
the
investor
holds,
and
these
assets
are
not
visible
to
other
parties
and
vice
versa.
A
broker
dealer
could
be
actually
be
working
with
their
own
sets
of
custodians
and
auditor,
but
in
reality
the
investor
and
broker
dealer
might
have
executed
against
each
other
on
an
exchange
or
a
decentralized
venue,
but
eventually
they
are
settled.
B
These
are
all
settled
independently
in
independent
data
records
within
these
asset
registry.
The
you
know,
if
I
here
I've,
given
you
to
accommodate
these
implementation.
There
are
now
zero
knowledge,
proofs
and
homomorphic
encryption.
That's
for
another
day's
talk,
but
that's
those
are
all
this
being
the
technology
behind
the
vendors
are
implementing
to
make
this
whole
thing
secure,
identifiable
and
also,
interestingly
enough,
you
get
to
other
infrastructure
requirements
like
kyc,
aml,
lockups
settlement
finality
and
one
another
interesting
thing
that
happens
is
both
the
custodians
who
are
engaged
in
settling
this
asset.
B
Well,
you
know
this
is
always
the
battle
between
centralized
and
decentralized
right,
the
the
disadvantage
in
the
sense.
This
is
a
much
more
newer
infrastructure.
It
is
going
to
be
a
little
hard.
You
know
it
takes
some
time
to
build
this
infrastructure
and
create
confidence,
but
it
is
essentially
you
know.
The
disadvantage
if
you
really
want
to
look
at
is
the
liquidity.
B
The
liquidity
provision
like
dtcc,
says
that
you
know
you
for
every
100
of
total
or
whatever.
If
you
do
an
rtgs
settlement,
the
netting
benefits
is
significant,
because
you're
only
going
to
put
up
four
to
five.
You
know
there
was
an
article
about
four
to
eight
dollars.
That's
all
I
actually
are
going
to
sell,
whereas
in
a
buy
in
a
decentralized
fashion,
you
may
not
get
that
kind
of
an
efficiency.
B
A
B
A
Also
one
more
comment:
money
is
present
in
a
bilateral
netting
situation,
but
it's
possible
to
enlarge
that
group
to
others
towards
recreating
some
form
of
centralized
multilateral
setting
netting
sorry
through
through
this
infrastructure.
But
that's
that's
much
more
complex.
In
fact,
netting
multilateral
netting
is
a
np
company
problem.
A
A
That
means
you
know
it
adjusts
to
the
pace
of
the
market,
like
let's
say
that
you
say
it's
two
hours,
but
when,
in
terms
of
high
volatility
and
high
throughput
the
netting
cycle
shrinks
to
one
hour
or
whatever
you
know
there
can
be
other
other
structures.
But
for
this
we
need
a
highly
sophisticated
program.
B
So
some
of
the
solutions
like
confidential
computing
and
there
are
solutions
from
vendors
like
r3
or
addressing
that,
but
that
is
still
in
research
space
today,
they're
not
they're
still
in
alpha.
But
yes,
in
the
longer
term,
it
is
possible
to
have
multiple
parties
join
together
and
then
to
increase
the
improve
the
liquidity.
But
then
you
are
giving
up
a
little
bit
on
the
credit
risk,
so
it's
always
a
balancing
act
and
it
is
very
possible
that
a
bilateral
netting
exists
as
well
as
multilateral
netting
exists.
C
And
also
I
like
to
speak
to
the
issue
of
anonymity
and
pseudonymity
regarding
our
transactional
activities
on
dfmi,
in
our
opposition
or
in
conjunction
to
the
blockchain
technology
like
money.
During
the
course
of
your
presentation,
you
actually
mentioned
the
fact
that
okay
transactions
on
the
dfmi
would
actually
happen,
and
you
will
not
know
the
parties
involved
because
of
the
anonymity
of
the
dfma,
for
instance.
C
A
B
Yeah,
so
you
do
want
anonymity,
because
you
do
not
want
your
any
of
your
your
competitors
to
know
your
holdings
or
the
the
amount
of
holdings
that
that's
a
big
no-no
with
with
you
know,
as
a
participant.
At
the
same
time,
you
want
a
transparency
and
accountability.
Thus
things
are
all
again.
This
is
all
based
upon
what
kind
of
permissions
that
the
various
participants
have.
For
example,
a
regulator
has
full
account.
You
know
full
access
to
the
model
of
all
what
he
calls
the
asset
registry.
B
A
B
Yeah
right,
that's
fine!
So
the
you
you
do,
you
do
want
complete
anonymity
and
confidentiality
when
it
comes
to
the
actual
positions
from
the
individual
investors
perspective
or
a
broker
dealer's
perspective,
but
you
want
full
accessibility,
accountability,
auditability
from
all
these,
let's
call
the
regulators
or
administrators
perspective,
and
that's
where
the
permissioning
layer
or
of
these
assets
of
asset
registry
is
such
fine-grained
that
each
one
gets
what
they
need
to
extract
so
that
you
are
addressing
the
the
needs
of
each
participants.
B
You
know
based
upon
you,
know
the
market
conditions
so,
to
a
large
extent
you
do
not
want.
I
mean
particularly
in
a
security
transaction.
I
I
definitely,
if
I'm
an
investor,
I
do
not
want
my
investing
position
to
be
visible
to
any
other
market
participants
other
than
maybe
my
custodian,
that's
it.
But
you
know
for
auditing
purposes
and
administrative
purposes.
I
may
give
special
permissions
to
my
administrator
and
auditor,
and
definitely,
as
I.
C
B
C
B
Yeah,
so
this
is
again,
I
don't
want
to
go
too
far
into
it,
but
what
we
are
trying
to
say
is
that
is
we're
not
talking
about
another
560
years.
The
market
structure
and
the
infrastructure
is
all
being
built
by
various
players.
You
know
we
are.
We
are
actually
building
more
on
the
capital
markets
infrastructure
leading
to
issuance
to
trading
a
lot
of
the
spots,
because
we
have
experience
in
building
djcc
platforms
by
the
past
20
years.
B
B
The
capital
markets
requires
two
parts
to
this.
One
is
the
contracts
management
which
you
know
essentially
tracks
the
trades.
These
are
all
nothing
but
obligations
or
contracts,
and
then,
when
times
time
of
settlement
netting
and
settlement,
you
are
actually
going
into
a
settlement
platform
like
polychain
or
it
could
be
any
number
of
asset
chains.
You
want
to
be
able
to
settle
those
things
on
in
those
assets.
All
you
know,
within
a
matter
of,
let's
say,
minutes,
to
achieve
a
much
more
efficient,
netting
and
and
settlement
gates.
B
So
you
know
beyond
that.
There
are
more
interesting
things
coming
in
staking
deeper.
We
don't
have
time
for
that
today,
but
that's
where
it
goes.
Whatever
happens
in
today's
retail
structure,
you
know
all
those
market
structures
now
will
be,
let's
call
it
as
cleaned
up
and
then
presented
as
a
capital
market
structure
in
the
in
in
a
more
regulated
environment,
and
there
are
already
vendors
who
are
already
looking
at
d5
for
capital
markets
very
similar
to
what
polymath
is
doing
for
cash
security.
B
So
we
we,
we
see
a
lot
of
infrastructure
move
for
addressing
securities
in
this
whole
entire
life
cycle
of
of
digital
assets,
and
this
will
then
move
on
to
you
know,
lending
and
borrowing
market
structure.
Then
it
goes
into
derivatives
options,
so
you
are
going
to
see
a
much
much
more
market
oriented
approach
and
that
looks
very
different
from
then
from
what
we
have
the
current
market
structure
in
terms
of
an
equity
option.
There
are
equity
swaps
and
the
digital
options.
The
digital
swaps
may
look
much
different.
B
B
These
are
two
parties:
how
do
they
settle
net
and
settle?
Essentially,
we
maintain
a
contract
network
between
these
two
parties
and
we
provide
all
these
services
in
our
platform
and
these
parties
throughout
the
day
you
know
build
their
trade
structure
trades.
A
bunch
of
trades
are
essentially
obligations
or
contracts.
However,
you
want
to
call
them
and
then
that,
at
the
time
of
the
session
you
go
through
a
netting
process,
the
netting
can
be.
B
Last
year
as
one
of
the
assets,
and
then
we
are
using,
you
know,
circles
usdc,
which
is
a
which
is
a
stablecoin
on
the
public
network,
and
we
demonstrate
that
how
we
can
you
know,
settle
this
thing
between
these
two
parties.
For
simplicity's
sake,
if
party
a
is
going
to
transfer
asset
x
to
party
b,
it
needs
the
wallet
address
and
that's
what
we're
showing
you.
B
The
the
party
b
sharing
the
wallet
address
securely
to
party
a
and
party
a
goes
through
an
approval
process
of
essentially
the
custody
process,
of
ensuring
that
this,
their
payment
matches
the
original
contracts
and
once
they
they
are
satisfied,
their
actual
submit
the
transaction
to
the
network,
get
the
transaction
receipt
forward.
It
back
to
your
counterparty,
who
could
then
go
back
and
verify
the
transaction
that
it
is
what
what
party
has
party
a
hat
promise
is
what
she
has
delivered
and
vice
versa.
For
the
you
know
usd
usdc
securities.
B
So
this
is
a
a
bit
of
a
more
complex
exercise,
but
they
are
all
happening
in
parallel.
So
if
they
are
exchanging,
you
know
a
a
ton
of
you
know
large
sets
of
assets
throughout
the
day.
Everything
happens
in
parallel.
They
can
settle
these
things
and
across
multiple
networks.
In
matter
of
minutes,
it
all
depends
upon
whatever
the
delay
in
these
assets
or
whatever
the
network
delay
imposed
by
these
assets.
B
Just
just
to
give
you
a
very
quick
example
of
what
a
settlement
happens,
and
this
is
we've
implemented.
We
are
demonstrating-
and
this
shows
the
fact
that
you
can
have
a
bilateral
execution
trading
allocation
netting
settlement.
All
can
happen
independently,
and
that
means
you're
talking
about
thousands
of
these.
You
know
independent
parties
settling
amongst
themselves
in
real
time.
That
means
you
are
really
creating
a
24x7
market
infrastructure
I'll
I'll.
Stop
at
this
point,
so
we
don't
have
time
to
go
further,
we'll
leave
it
more
questions.
A
A
A
A
Regulators
are
writing
papers
every.
You
know.
I've
been
writing
papers
for
the
next
last.
Let's
say
five
years
now,
they're
focusing
on
you
know.
I
mean
they.
They
haven't
come
to
this,
but
they're
they're
they're
talking
about,
let's
say
bilateral
settlement
or
dvp,
but
then
they
are
aware
of
the
liquidity
needs
of
that
particular
situation.
So
bis
has
published
papers
on
this
other
central
banks
project
jasper
pro.
A
A
C
It's
how
you
have
a
liquidity
process
that
is
automated
and
you
are
instantly
granted
or
have
access
to
liquidity
if
you
transact
on
the
unesco
next
protocol,
because
generally
in
the
crypto
economy,
there's
a
liquidity
issue
on
decentralized
exchanges
compared
to
a
centralized
crypto
asset
exchange
platform,
but
maybe
you
can
actually
educate
me
further.
When
you
said,
liquidity
is
not
addressed.
A
Well,
liquidity
is
addressed
through
over
collateralization.
That
is
a
problem
because
you're
not
using
your
money
properly
right,
I
mean
you're,
depositing
150
of
your
assets
somewhere
to
get
100
value
from
it.
And
this
we
are
not
talking
about
you
know
like
capital
market
infrastructure.
Right
I
mean
this
is.
C
B
Are
there
are
automa,
you
know
exactly
like
uni-swap
type
of
infrastructures
being
developed,
but
that's
going
to
be
very
highly
regulated
and
again.
This
is
another
thing
that
sec
kind
of
guides,
everyone
to
say,
move
away
from
rtgs
instead,
because
there's
also
a
bigger
issue
of
what,
if
you
have
like
20
exchanges,
all
of
them
are
doing
rtgs,
that's
not
very
good
for
the
marketplace.
B
You
really
want
decentralized,
exec,
centralized
execution
but
decentralized
clearing
that
will
bring
you
a
lot
of
the
liquidity
and
efficiency
gains,
which
you
know
the
most
ats,
which
all
the
today's
crypto
exchanges
do.
Not
they
all
do
rtgs,
which
may
work
well
for
retail
market.
But
you
know
acc
is
not
happy
about
it,
that
they
are
not
interested
in
that
kind
of
model.
C
So
there's
a
provision
in
that's
law
that
this
is
actually
a
eu-wide
law
in
a
way,
but
then
it's
relevant
for
the
purpose
of
understanding
how
to
regulate
the
decentralized
finance
space
generally,
so
there's
a
requirement
that
the
pii
of
a
counter
party
can
actually
be
written
into
the
can
actually
be
linked
to
the
address
for
the
purpose
of
identification,
and
I
think
there
is
a
good
point
and
also
regulates
the
space.
This
is
addressing
the
question
and
earlier
one
of
the
questions
on
this
call.
A
Similar
laws
exist
or
suggestions
exist.
In
fact,
they've
gone
even
further
to
saw
source
of
funds,
which
is
not
just
the
wallet
that
you're
transferring
to
or
from,
but
also
the
wallets
that
come
from
the
outside
to
transfer,
and
so
on
I
mean
they
want
kyc
aml,
but
the
problem
with
that
is
who's
going
to
who's
going
to
keep
this
pii
and
what
happens
if
there
is
a
problem.
You
know
if
there's
an
attack
on
that.
So
all
of
these
things
are
happening
and
we
have
to
stop.
A
Unfortunately,
and
this
we
will
continue
this
discussion
mailing
list
other
places
and
hopefully,
marta
and
or
karen
will
send
us
the
link
to
the
youtube
live.
If
we
had
the
old
you
know,
if
you
have
a
youtube
live,
then
we
will
publicize
it
on
the
next
call
next
couple
of
calls,
and
then
we
can
see
how
the
responses-
thank
you
all
for
attending
and
that'll
be
today,
unless
you
have
something
more
to
add
money.