Editor’s note: This article from the currency, the author: Gu Yanxi, Huatai Securities served as deputy director of information technology and several Financial Services Company COO, authorized reprint by Odaily daily planet.
As everyone knows, the rise of the Internet has led to the rise of some industries and some industries also disappeared. By the impact of the Internet industry including print media, dissemination of audio products and retail industry. The Internet is a free exchange of information, the blockchain is brought about by the value of free exchange. The Internet technology greatly reduces the demand of information intermediary, block chain technology will significantly reduce the demand for the value of the intermediary. In the process of value chain substituted block intermediary, we can see clearly now, one is about to be replaced by the value of intermediary between banks and clearing institutions.
IBM recently announced that the supervision of financial institutions by it and the star system to jointly develop the construction of World Wire will connect all countries. These financial institutions can be based on the star protocol, direct transfer between different currencies with each other at a low cost and basically real-time manner.
As a support point to point in different currency transactions directly between the agreement, star compared with Ripple protocol is more efficient and lower cost. The star fund is a not-for-profit. This is different from the for-profit company Ripple. The star agreement therefore in technical performance and organizational form, are more attractive than Ripple. Now, the agreement with IBM’s technical capacity, resources and market brand together, believe that they will be able to fight in the world to cooperate more financial institutions, improve the transfer efficiency between different currencies. A few years ago, IBM has helped a little-known small software company called Microsoft. After a few years, I believe it will help the stars become a transfer agreement between the global financial institutions deal in the world.
In this global multinational transfer business in cooperation with IBM, the star will not only overcome the cross-border transfer mode based on Ripple protocol, and will replace the current center to provide cross-border transfer services. This is the most important representative of Swift.
At present, the cross-border remittance liquidation mechanism is SWIFT. It is basically a monopoly of the organization. Need to provide direct cross-border remittance services of the bank, to become its members. If the bank can not become a member of it, but also to provide cross-border remittance services, then the bank only by a member of the SWIFT to complete the transfer service. In this case, the cross-border transfer cost is higher, lower efficiency.
After the block chain technology industry had formed a consensus, that is clearing it first impact in the financial sector, including banks and securities clearing agencies. These are the center of the clearing agency system. The clearing member should be carried out with the docking system by the clearing agency, clearing agencies to ensure that all transactions between the banks correctly. Now it seems that such a process is cumbersome and complex. But the liquidation center technology model mechanism is the development of computer technology and related. Clearing agencies such is usually supported by IBM mainframe. For example, I had the service of American Option Clearing Corp was founded in 1973, it is responsible for clearing and settlement of all options transactions in the United states. The computer system it has been IBM mainframe. Therefore it is natural computing model of a centralized computing model.
The center of the previous liquidation mode optimal liquidation mode. Although it is cumbersome and inefficient, but it does guarantee that every bank clearing and settlement between the accurate completion. There is no liquidation center of this system, the financial industry will not have today’s accurate operation.
However, there blockchain technology between the various institutions of the liquidation point between the possible mechanism between does not need a centralized mechanism to ensure all liquidation. IBM World Wire is the direct landing application block chain technology in bank liquidation between. World Wire system is running in a production environment, and IBM had just signed six international banks using World Wire service. This shows that the application of block chain technology in this area is no longer a theoretical discussion, but to be able to use the actual landing. It can be said that the IBM agreement in this regard and stars to achieve from 0 to 1 of the breakthrough, the future development should be increased.
Special attention is needed, the liquidation application block chain technology in banking between the first starting point is the international cross-border transfers. This problem has been the pain points of cross-border transfers. But after because it is the technology center of the monopoly system and the mechanism, so this problem has not been solved. In addition, providing cross-border transfer service requires financial institutions in various countries cooperation. But these financial institutions are different in the area is in the range of rule of law, no government or international organizations have monopoly power to these banks to promote cooperation between them. This scenario therefore is the most suitable for block chain technology. This is why the application of clearing block chain technology among banks in the first international, rather than in a range of countries in the.
Application of clearing block chain technology among banks will first started in the international business, but will be gradually entered into various countries. For example, the current bank liquidation between the United States is the use of ACH system. This system has actually started in 1974 behind the demand of the times. So in the United States, has emerged with its competitors, such as Visa Direct clearing system. But the clearing system are based on the center of the system. These systems in terms of cost and efficiency can not be distributed with the clearing system of competition. Now that World Wire can solve international cross-border transfers liquidation, will appear the blockchain technology based on the liquidation of financial institutions for the same kind of legal tender solution. Just where to start and how much time is needed for the problem.