Page 58 - FIGI: Security Aspects of Distributed Ledger Technologies

In a pilot-project partnership with seven rural
banks, Philippines-based bank Unionbank worked
with ConsenSys Solutions to build a decentralized
approximately real-time inter-rural bank payment
platform called Project i2i to connect rural banks to
each other and to national commercial banks, using
Enterprise Ethereum. This effectively brings these
some 130 rural bank partners into the domestic
financial system and increases inclusion access to the
communities in which they operate.
427
Payment Switching, and Clearing and Settlement
Financial services firms can minimize operational
complexity with the use of DLTs. Systems that rely on
trusted intermediaries to support and/or guarantee
the authenticity of a transaction today could instead
be efficiently conducted using DLTs. 428
Currently, C&S between parties may take up to
two to three days to achieve, leading to credit and
liquidity risks. C&S time can be reduced to min-
utes with DLTs. Private, permissioned blockchains
between banks – such as R3’s Corda - could poten-
tially authenticate transactions and undertake C&S
considerably faster.
This may help to reduce counterparty credit risk,
which in turn may reduce an institution’s capital
requirements, collateral, or insurance where required
by regulation to prevent settlement default. Permis-
sioned, private blockchains achieve this savings by
removing the need for trusted intermediaries and
granting the counterparties real-time visibility to
their respective liquidity positions whilst undertak-
ing netting. Similarly, this real-time liquidity visibility
allows digital financial service providers (DFSPs) to
use DLTs to remove the need for prefunding in bilat-
eral interoperability designs. 429

56 Security Aspects of Distributed Ledger Technologies