Third technical standards and stable currency

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.

So far in a very long period of time, the Ethernet ERC20 technology has been the industry standard workshop in the production of standard currency stability . Whether USDC, GUSD or TUSD are based on the standard of production. The ERC20 standard is not only the stability of currency default technical standards, but also the default ST technical standard. The formation of this standard is not only because the standard is suitable for the production of digital and digital currency securities, but also because the etheric Fang in the market widely used. So even if there is a functional ERC20 stronger than the standard, it was accepted by the market facing enormous difficulties. ERC20 technical standard as stable currency until recently has been the biggest challenge. This challenge is from the star system.

The star system is a block chain technology before bottom, also have company on the basis of making a stable currency and practical passes . But the acceptance of very small star system itself and some problems in the market, so the star system has failed to become a strong competitor at the bottom of the chain block. Although the star system began a partnership with IBM in 2017, but because the cooperation does not have the actual effect, so the star system as a block chain still did not influence the underlying technology in the market. This situation has to continue to this day. IBM announced its cooperation with the star system to provide cross-border remittances to the global regulated financial institutions. There are now five international banks signed a cooperation intention. In addition, a start-up company Stonghold in San Francisco also announced the stable currency issue on the underlying dollar based on star system. But this stable currency will be mainly used to transfer service between institutions. More importantly, according to Coindesk reports, the stable currency Stronghold has been a verbal approval from the United States regulation, formal notice is expected to occur in 2019. The progress of star systems will make it as a stable currency bottom technology obtained the rapid promotion in the global scope. The star system will soon become the second stable following the ERC20 standards and technical standard currency.

So, in the above technical standards, there will be a third standard? Considering the limitations of the above system, I think there is definitely.

First of all, a new type of stable currency, not only need the stable currency mechanism, but also need to have the corresponding circulation settlement mechanism . Bitcoin is not just a single digital currency, but also the block chain technology to support it in the bottom of the settlement distribution. The star system not only provides a mechanism to produce the digital currency, but also provides technical support for the bottom block circulation and settlement of it. Similarly, the bottom block chain technology standard of third kinds of stable currency also cannot do without the support of its circulation and settlement.

As the defects of financial products to support Ethernet workshop for producing and circulation of the underlying technologies has been based as everyone knows. For star system, intelligent contract a major shortcoming of it is its support is not Turing complete, but just a simple string. All kinds of business rules and regulations in the financial business so we cannot through smart contracts to realize. So the star system is especially suitable for the most simple monetary financial products. But when it comes to more complex financial products such as ST, it will not be able to provide good technical support.

I think the future of the digital world is a digital asset finance network ecosystem. The network of ecological technology base must be block chain technology. The reality of the assets and interests through the mapping of ST to the network environment, and traded in the network environment. In the network environment, stable currency must be produced in the ecological mortgaged assets and using a distributed digital encryption method based on the. Stable currency generated in this way.

In conjunction with the various digital stable currency issued by the central bank exists, use common circulation in the network environment. Therefore, block chain technology base of the network of ecological need issue and circulation to support ST, and stable currency issuance and circulation. Measure according to this standard, whether it is square and etheric or star systems are unable to meet such a requirement. Therefore, will produce a new bottom block chain technology to support stable currency and ST production and circulation transactions. A bottom like this, in addition to the performance, security and privacy aspects need to meet the basic requirements of PFMI, also need to meet the following conditions.

First of all, it must be a Turing complete contract to support intelligent system . Because ST must meet a variety of financial and regulatory rules, so only Turing complete intelligent contract system, in order to meet the above requirements.

Secondly, this system must support ST center after distributed trading clearing and settlement . One of the basic characteristics of digital financial network ecosystem in the future is that users can freely deal with the value of the variable ST and the freedom to use its own stable currency payments and transfers. The trading of securities and money scene should be together. So we need a stable currency and clearing technology underlying support after the transfer of securities trading.

Third, the underlying technology is certainly open. If the network needs to use it in the global expansion, the underlying technology to global users . Otherwise, this system is difficult to cross borders and different business culture. Whether the Ethernet or star system are open source, and it is not for profit. This new technology is likely to bottom block chain is open-source.

Fourth, from the order of development, is the underlying block chain appear first, then businesses on the basis of development and construction of various commercial applications . This new technology should be in accordance with the order of the bottom. It is perhaps the market has some solutions, or has not appeared.

Fifth, in the first scenario, it is likely to appear first in the ST market, because the market is stable currency and encryption digital assets directly the production and application of the scene .

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