Institute of International Finance

This paper will focus on newly emerging distributed ledger technologies and related protocols, which were inspired originally by Bitcoin, and their potentially important applications to payment, clearing, and settlement in the wholesale markets.

This paper will explore the immense potential of blockchain technology, as well as some of the challenges it poses to the industry and regulators.

Blockchain technology in effect removes the need for a clearing house or financial establishment to act as intermediary during a transaction and in doing so transfers control and power from a central authority to the many, facilitating quick, secure, and inexpensive exchanges of value.