Goldman Sachs has filed a patent on its developed FX trading blockchain with the US patent and Trademark Office. What is Goldman Sachs trying to achieve with the FX trading blockchain?
14 September, AtoZForex – Goldman Sachs, a major US investment bank, is developing a blockchain technology to replace the traditional Forex market. As it is reported in a Patent Application by the US Patent and Trademark Office, Goldman Sachs indicates a number of problems regarding the way Forex trading is currently being maintained and also so-called cryptocurrency-related problems. Earlier last year the bank allegedly was working on a Cryptographic Currency For Securities Settlement, or a “SETLcoin.”
Moreover, the application by Goldman lists such cryptocurrencies, as Ripple and Bitcoin and it explains the likelihood of hidden identity of a certain party. As the official application states it is possible “by using arbitrary account numbers that are not easy to attribute to a specific real-world party, large financial institutions (e.g., central banks) cannot rely on such obfuscation alone because the sheer size and volume of their transactions may reveal their identity to the general marketplace.”
See also: UOB 14th Sept trade ideas for forex
Advantages of Goldman FX trading blockchain
Additionally, Bitcoin and Ripple lack built-in identity checks that assist regulators with maintaining anti-money laundering (AML). Goldman then states that there is a need in the market for new systems and methods that will help to process transactions as quickly as Ripple or Bitcoin with no risk of privacy disturbance for the parties involved.
Furthermore, the bank proposes FX trading blockchain system that uses authentication methods to confirm the identifying information and execute know-your-computer (KYC) or AML checks. The system, suggested by Goldman, uses cryptographic codes to verify electronic signatures attached to data messages by comparing the electronic signatures to hashes acquired from managing the data messages with a public key of the signing party.
Goldman Sachs’ blockchain system addresses the issues of the major time delay that emerges in current exchange processes by offering methods that are able to operate in real-time. Following on this, the bank states that its system is able to address the issue of disclosing the accounts balances or transactions data to third parties.
Think we missed something? Let us know in the comments section below.