(TRUNEWS) On April 11th approximately 100 executives from Wall Streets largest financial institutions gathered in secret to field-test a digital dollar replacement for global financial services.
Bloomberg reported that representatives from private sector behemoths such as Citigroup Inc., Visa Inc., Fidelity, Fiserv Inc., and Pfizer Inc. were part of the historic meeting at Nasdaq’s Time Square office.
The event was organized by Chain — a San Fransisco tech startup — and according to Marc West, Fiserv’s chief technology officer, attending firms were successfully able to instantly and independently resolve regular financial services without the need of current banking solutions.
“We created a digital dollar” to show the group at Nasdaq an instant debit and credit on a blockchain, West told Bloomberg. “This is the first time the money has moved.”
Asset issuance, simple payments, bilateral trades, orderbook sales, collateralized loans, and auctions were all part of the package of financial services which Chain boasted the ability to offer through their P2P blockchain software Chain Open Standard debuted at the event.
Bloomberg reported that the Wall Street executives were captivated by the technologies potential to “free up” capital — valued in billions — which usually takes days to process through current banking protocols.
Chain’s CEO, Adam Ludwin, told Bloomberg that his company has successfully engineered a pre-made blockchain platform which its customers can customize for their unique business solutions.
“We’ve been quietly building with a whole bunch of folks for a few years,” Ludwin said. “Blockchains are networks, so we think collaboration is important, but what’s even more important than collaboration at the beginning is getting the model right.”
“The more press, the less quality of the dialogue and problem-solving,” Ludwin said, hinting that the reason the event was kept secret was so the attendees could freely share their ideas without public scrutiny.
The formulation of a “digital dollar” is a ground breaking feat because under the current banking system dollars deposited in bank accounts don’t actually move when you make an electronic payment. Rather, a message is sent and no assets change hands until confirmations are received by the participating financial institutions.
With Chain’s software — and other blockchain systems such as Bitcoin — assets are pre-loaded and therefore are instantly exchanged upon the transactions initiation. “Instead of a record or message being moved, it’s the actual asset,” Ludwin said, adding that “the payment and the settlement become the same thing.”
According to Ludwin, blockchain technology has already been validated by the Wall Street elite, and now their ready to focus on creating integratabtle solutions. “Putting it all together is no small amount of work, nor is re-engineering business processes within large organizations,” Ludwin said. “This isn’t ‘financial engineering.’ This is software engineering that is going to reshape financial services.”
Nasdaq CIO Brad Peterson said utilizing blockchain technology will greatly enhance the ability to allow this ‘reshaping’ of financial services away from legacy computer based systems. “That’s the great opportunity — how to unlock that ability to work your way out from under the mainframe era,” Peterson told Bloomberg. Peterson also mentioned that Nasdaq had already undertook a research project with Citigroup, analyzing the potential of blockchain technologies.
Ian Lee, the head of Citigroup’s global lab network and acceleration fund, said one of the first areas of research Citigroup undertook was how digital cash could be used. Bloomberg reported that Lee was impressed with the variety of clients Chain brought together for their secretive mastermind, especially since public collaboration on Wall Street is rare.
“A lot of companies are facing the same problems with how to make blockchain a reality for their business. While blockchain technology has a lot of potential, it will need to integrate with and co-exist with the financial system that exists today,” Lee told Bloomberg.
A Bitcoin logo is displayed at the Bitcoin Center New York City in New York’s financial district July 28, 2015. REUTERS/Brendan McDermid/File Photo
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