Guernsey's 'Blockchain First' Cuts Out Banks, Brokers
by Amanda Banks, Lowtax.net, London
13 December, 2017
Two Guernsey funds have transferred digitized notes on a private blockchain, in what is believed to be a first for the island.
Instead of transferring the notes through a traditional clearance service such as Euroclear or DTC, the notes were created and transferred on the "ILSBlockchain," a private blockchain.
ILSBlockchain cleared a new participant to acquire the digitized notes, including satisfying the required know-your-client (KYC) / anti-money-laundering (AML) procedures, and produced a cryptographic key representing the trade. The trade was "advertised" on ILSBlockchain enabling all registered participants with sufficient funds in their digital wallet to elect to acquire the notes.
Cedric Edmonds of Guernsey-based Solidum Re, which acted as paying agent and common depository, said the trade was created, executed, and confirmed on the ILSBlockchain in a matter of minutes.
"The transaction was simpler, quicker, and more efficient than a standard DTC/Euroclear trade The trade was done without the use of a bank or a broker-dealer and no fees were involved. It was also performed perfectly anonymously without direct contact between the buyer and seller, but safe in the knowledge that all participants have been through the required KYC/AML performed by a regulated entity," said Edmonds.
Dominic Wheatley, CEO of the island's financial services promotion agency, Guernsey Finance, said: "With this trade, we are seeing an example of the evolution of the future of finance. Guernsey is a specialist center for insurance-linked securities and is a jurisdiction well-renowned for its innovation. This latest step forward in the advancement of blockchain is testament to that and we look forward to seeing more trades follow in this way."
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