Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Ripple Joins Hyperledger, Central Banks experimenting with Blockchain Securities Swaps

Ripple (XRP) has joined the Linux Foundation-sponsored Hyperledger Project. This move is potentially disruptive because the Hyperledger Project is an effort to develop commercial decentralized apps (DApps) for the Ethereum (ETH) blockchain ecosystem.

It is not clear if this is an attempt to integrate Ripple with Ethereum, but such an effort would make a lot of sense. Ethereum-based ERC20 protocol tokens made up 91.2% of the cryptocurrency Market Capitalization on 12 January 2018, AminCad reported on Medium. The percentage of the altcoin Market Cap invested in ERC20 tokens was up from 73.8% on 2 July 2018.

Ethereum-based products now dominate the cryptocurrency market, so it would make a lot of sense for Ripple to integrate with them. That would increase Ripple’s use and value. Ripple is essentially an attempt to create a protocol token that will serve as a gateway between the cryptocurrency ecosystem and the banking system.

Adding the largest cryptocurrency ecosystem and the many platforms integrated with it to Ripple’s gateway makes a lot of sense. Such a move might generate a lot of cash flow for Ripple, Admin Cad estimated the Market Capitalization of ERC20 tokens at $62 billion on 12 January 2018.

Ripple Teams up with Hyperledger

Ripple is of several new Hyperledger members mentioned in a 28 March Hyperledger Project press release. Other organizations joining the project including Blockchain Technology Partners, Beijing Truth Technology, CULedger, Greenstream Technology, KompiTech, the MATRIX Foundation, REMME, Shenzen Rongxun Technology Inc., Spin Systems Inc. Versia, and Xillab.

The Hyperledger Project is one of the blockchain research and development efforts. Its premier members include such giant corporations as America Express (NYSE: AXP), Airbus (EPA: AIR), Accenture (NYSE: ACN), Baidu (NYSE: BIDU), Daimler AG (ETR: DAI), Cisco Systems (NASDAQ: CSCO), Hitachi (TYO: 6501), IBM (NYSE: IBM), Fujitsu (TYO: 6702), JPMorgan Change (NYSE: JPM), Intel (NYSE: INTC), SAP (NYSE: SAP), and NEC (TYO: 6701).

General Members include many cryptocurrency development companies including ArcBlock, China Merchants Bank, GM Financial, and Kaiser Permanente to add variety. Hyperledger’s Associate members include the Ministry of Finance of the Republic of Lithuania, the Bank of England, the Federal Reserve Bank of Boston, Smart Dubai, the National Association of Realtors, the Digital Chamber of Commerce, and the Produce Marketing Association. Academic Associates of the Hyperledger Project include the University of Cambridge, Peking University, and the UCLA (the University of California at Los Angeles) Blockchain Lab.

Central Banks Investigation Blockchain Security Swaps

The European Central Bank (ECB) and the Bank of Japan (BoJ) are investigating the possibility of using blockchain-based distributed ledger technology like that being developed by the Hyperledger Project for Securities Swaps.

This is big news because securities swaps involve the transfer of bonds between central banks. The BoJ and the ECB; which represents the European Union, are two of the largest financial institutions in the world.

The BoJ and the ECB are conducting research into a new type of securities settlement called delivery versus payment (DvP), Altcoin Today reported. The DvP would apparently take place in the blockchain and utilize distributed ledger technology.

Delivery vs Payment is outlined in a whitepaper; about an effort called Project STELLA, that was released on 27 March 2018. The paper describes Project STELLA as a joint research effort of the BoJ and the ECB. The subject of the paper is Securities Settlement Systems: delivery-versus-payment in a distributed ledger environment.

Project STELLA is designed to determine if blockchain and distributed ledger technology can speed up security settlements and settlement swaps. The DvP would presumably make the process more secure and transparent by creating a permanent and tamper-resistant record of settlements.

This might give rise to a new larger international market for securities settlements on the blockchain. Some commercial banks including the Bank of New York Mellon (NYSE: BK) are working to develop similar technologies. BNY Mellon is one of nearly a dozen banking giants trying to develop a token for major bank transfer called Utility Settlement Coin (USC).