Hi Rita! Thanks for the post, and I genuinely enjoy your stuff. However, on this one, a couple questions. First, if you have genuine interoperability, why do you need a consortium of banks? I do like your point on programable money, and it's a short step to embedding KYC/AML protocols into smart contracts, and while there is a lot of benefit to this and it is happening, most banks still would prefer to do AML checks off-chain prior to embedding the instructions into the contract.
I look forward to your book, and would love an offline chat about the above.
To date, Banks have mostly created their own solutions to test the technology and see if there was a strong business case (a natural process in any technology implementation). But those solutions are not currently interconnected, which reduces liquidity (e.g. the ability to sell an asset quickly is restricted by the number of buyers that are willing to buy the same. If the market is limited to one bank, the liquidity is small - i.e. there are many buyers to start with).
Some Banks have suggested that other Banks and players should use their solution. But this is a hard sell - if you are Bank "A" you would not want to use the solution of Bank "B" because they are your direct competitor and so you do not want to give them an advantage.
So, in order to bridge the gap and create interoperability some banks have come together as a consortium and created some solutions. RLN is just one example. SWIFT for example is also exploring if they could play this role. And there are many others.
I do not know what is the right approach here, or which solution will take off, but I find interesting to understand the context and how different players are approaching it.
Hopefully this clarifies. But also happy to have an offline chat
Hi Rita! Thanks for the post, and I genuinely enjoy your stuff. However, on this one, a couple questions. First, if you have genuine interoperability, why do you need a consortium of banks? I do like your point on programable money, and it's a short step to embedding KYC/AML protocols into smart contracts, and while there is a lot of benefit to this and it is happening, most banks still would prefer to do AML checks off-chain prior to embedding the instructions into the contract.
I look forward to your book, and would love an offline chat about the above.
Hi Vince, thanks for the comments and questions.
To date, Banks have mostly created their own solutions to test the technology and see if there was a strong business case (a natural process in any technology implementation). But those solutions are not currently interconnected, which reduces liquidity (e.g. the ability to sell an asset quickly is restricted by the number of buyers that are willing to buy the same. If the market is limited to one bank, the liquidity is small - i.e. there are many buyers to start with).
Some Banks have suggested that other Banks and players should use their solution. But this is a hard sell - if you are Bank "A" you would not want to use the solution of Bank "B" because they are your direct competitor and so you do not want to give them an advantage.
So, in order to bridge the gap and create interoperability some banks have come together as a consortium and created some solutions. RLN is just one example. SWIFT for example is also exploring if they could play this role. And there are many others.
I do not know what is the right approach here, or which solution will take off, but I find interesting to understand the context and how different players are approaching it.
Hopefully this clarifies. But also happy to have an offline chat