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September 15, 2016, 05:00:34 PM |
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"By using such a private blockchain, Goldman Sachs is looking to venture into the world of foreign exchange. Or that is what their patent filing seems to indicate, as they will use a distributed ledger to process financial transactions. These transactions are all related to foreign exchange transfers, as mentioned in claims number 5 on the form.
It makes a lot of sense to use blockchain technology for foreign exchange. Trading currencies in its current form are both slow and costly, with a lot of middlemen involved. By using distributed ledgers, those middlemen can be removed from the transaction, increasing its efficiency and lowering the costs.
At the same time, the patent filing also mentions how the blockchain remains a risk factor. With its unprecedented transparency, anyone can see forex trades taking place in real-time. This explains the decision to use a private blockchain, as only eligible parties will see specific details of a transaction.
Moreover, private blockchains are a lot easier to manage when it comes to regulation. Conducting KYC and AL procedures on an immutable record is very straightforward. Additionally, regulators would be given access to this ledger at any given time, removing any friction associated with the process.
The big question is whether or not patents have a rightful place in the blockchain world. It makes sense interested players do not want their competitors to find out how the new platform works. But that doesn’t mean no one should be able to use it unless it involves some secret proprietary Goldman Sachs technology."
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