??Reducing Settlement Risk and Amplifying ??Embedded Supervision with Public Blockchain: A Proposal for Interoperable mCBDC Platform to G20 Techsprint
??Reducing Settlement Risk and Amplifying ??Embedded Supervision with Public Blockchain??: A Proposal for Interoperable mCBDC Platform Facilitating Data Standardization and API Integration??.
Intrasettle??, a pioneer in advancing the utilization of Central Bank Digital Currencies (CBDCs)??, is thrilled to present its proposal for the G20 TechSprint?? ♀? based on Problem Statement 3: Technology solutions for multilateral cross-border CBDC platforms??. Our proposal is focused on reducing settlement risk?? and amplifying embedded supervision?? with the use of public blockchain technology??.
Our solution, Intrasettle, is a multi-CBDC platform designed to revolutionize cross-border payments. It streamlines the multi-step process of cross-border payments, which includes the exchange of local currencies for foreign ones, the transfer of these currencies, and the compliance with non-settlement processes like Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT).
Intrasettle differentiates between settlement and non-settlement processes, thus allowing non-settlement processes to be processed in-country, subject to local regulations. This is achieved through our Dynamic CBDC model that offers flexibility and supports different policy choices. Our platform also provides interfaces for real-time gross settlement, thereby enhancing efficiency.
Intrasettle has successfully piloted three types of transactions: issuance and redemption of CBDC between central banks and their domestic, commercial banks, cross-border payments between commercial banks in local CBDC, and cross-border payment versus payment (PvP) FX between commercial banks in local CBDC.
Intrasettle’s Blockchain Interoperability Framework, coupled with standardized APIs, enables seamless integration between CBDC platforms and domestic payment systems. By fostering interoperability at scale, this framework makes cross-border transactions more efficient. The use of smart contracts further automates transaction execution, providing a reliable, efficient solution for cross-border transactions and digitized governance.
Security lies at the heart of Intrasettle. We employ Zero-Knowledge Proof (ZKP) technology, allowing for transaction verification without revealing transaction details, thereby balancing privacy and transparency. Our platform also incorporates advanced cybersecurity measures, such as intrusion detection systems, anti-DDoS measures, and cutting-edge encryption techniques.
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While our existing model is inherently modular, accommodating a range of capabilities to assimilate emerging technologies, we acknowledge the necessity for continual advancements, particularly in the domain of FX and liquidity technology solutions. Our focus is to enable efficient settlement in a broader spectrum of currencies, especially those of emerging markets and developing economies (EMDE).
Intrasettle envisions enabling a global network of connected CBDC platforms and interoperable CBDCs. Our next major step is developing and testing a regional multi-CBDC platform to a high level of production fidelity. With Intrasettle, we are taking a significant leap towards a more efficient, secure, and inclusive global financial ecosystem.
By leveraging the power of Automated Market Making (AMM) algorithms and the versatility of smart contracts, we aim to create a more resilient and responsive system. AMM algorithms facilitate real-time FX rate adjustments, thus ensuring competitive pricing and mitigating the risks associated with FX volatility. Simultaneously, smart contracts provide the infrastructure for real-time, cross-currency transactions and settlements, further reducing liquidity demands and enhancing the overall efficiency and usability of the platform.
We are cognizant of the challenges posed by unexpected volatility in FX rates and the resulting liquidity risks. These risks can make multilateral platforms operationally difficult, particularly when the platform processes multiple currencies. We are integrating state-of-the-art FX and cross-currency liquidity technology solutions to mitigate these risks. These solutions aim to provide competitive pricing, settle payments in a larger number of currencies, including EMDE currencies, on a real-time basis, and reduce liquidity demands. Potential features include liquidity optimization, liquidity bridges, and limit order books, all driven by data analytics, predictive machine learning tools, and smart contract technologies.
By participating in the G20 TechSprint, Intrasettle aims to demonstrate its commitment to driving innovation in cross-border payments, enhancing financial inclusivity, and strengthening the global financial infrastructure. We believe our proposal will prove instrumental in resolving the complexities of multilateral cross-border CBDC platform development, and we look forward to the possibility of sharing our insights and learning from others in this global effort.