Blockchain Standards in International Banking
DOI:
https://doi.org/10.13052/jicts2245-800X.732Keywords:
Standards, Blockchain, Smart Contracts, International Banking, DerivativesAbstract
This article discusses how blockchain standards need to be integrated into the other standards of international banking to facilitate the effective use of the technology. The first part of the article describes the role that blockchain could perform in international banking and why standards are needed for this. The second part of the article describes the role that standards of many different types perform in international banking. The third part of the article describes areas of potential deviation between standards developed for the implementation of blockchain technology and the existing standards which apply to international finance and why these conflicts cannot be ignored.
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References
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Ibid 56.
BIS, “BIS Quarterly Review”, September 2017, 67 https://www.bis.org/publ/qtrpdf/ r_qt1709f.pdf.
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BIS, “BIS Quarterly Review”, September 2017, 56 https://www.bis.org/publ/ qtrpdf/r_qt1709f.pdf.
IOSCO, “IOSCO Research Report on Financial Technologies (Fintech)”, February 2017, 55 https://www.iosco.org/library/pubdocs/pdf/IOSCOPD554.pdf.
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Ibid 1.
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The notional amount is the figure from which parties’ payments are calculated, whilst the gross market value is the value of those payments, at current market prices. By way of explanation, if the payments of interest under a loan were to be expressed as a derivative, then the amount of the loan on which the interest is calculated would be the notional amount and the gross market value would be the total amount of interest payable, valued as if it were payable at once.
An interest rate swap is a derivative transaction under which the two parties agree to exchange payments based on the application of different interest rates on the same notional amount. Under a cross-currency swap the notional amount for each party is denominated in a different currency, and the notional amounts are also exchanged at the start and end of the transaction.
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The others were making financial institutions more resilient, ending too-big-to-fail and enhancing the resilience of “shadow banking”.
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Indeed, that is the very expression used by some leading commentators, such as Lawrence Lessig. Lessig’s original work was in fact calledThe Code is Law and other laws of cyberspace (1999). Lessig published a second edition of this in 2006 calledCode 2.0.
Published byCPSS-IOSCO, April 2012.
