Blockchain developer IOV Labs said Tuesday it had created a proof-of-concept, for a permissioned blockchain network, based on RSK Smart Contract Network, in conjunction with the central bank and major commercial banks in Argentina including Santander and BBVA.
The Central Bank of Argentina (BCRA) is testing a new blockchain-powered clearing system that could be used by some of the country’s largest financial institutions.
The solution is aimed speed up fiat payments, make them more reliable and introduce end-to-end traceability, IOV said.
«By implementing this type of platform, the financial system will be able to build an integral collaborative ecosystem in line with the current modern technological advances and on par with the world’s most innovative financial systems,» said Diego Gutiérrez Zaldívar, CEO of IOV Labs.
«Given the global circumstances we are facing, we need now more than ever to use technology in order to optimize processes and provide better services to our citizens”, he added.
Network participants will include the BCRA, banks, clearinghouses and other financial entities. While currently in the testing phase, IOV and BCRA said that the new network could form the basis for an alternative clearing system.
While Argentina’s central bank was an early mover in looking at efficiencies created by blockchain, it has also taken a dim view on cryptocurrencies. It issued a statement as far back as 2014, telling citizens they could not use digital assets such as bitcoin as a form of legal tender and warning of potential fraud.
One of the goals of the BCRA-initiated proof-of-concept was also to demonstrate there are other viable use cases for blockchain technology besides cryptocurrencies, in particular using smart contracts.
The new layer trialed by the BCRA runs along the same lines as a similar blockchain initiative, also based on RSK, hosted by the country’s primary gas distributor earlier this year. Known as Gasnet, the idea was to use distributed ledgers to bring new efficiencies to Argentina’s backlogged gas certification process.
As other central banks move toward developing and issuing their own digital currencies, it isn’t yet clear if the BCRA’s developing interbank settlement layer could one day form the basis for a digital peso. CoinDesk has reached out for further information, though no reply was received by press time.
Asset Ratings Giant Morningstar Takes First Plunge Into Blockchain Securities
As part of a $39.7 million investment in FAT Brands, the owner of «fast casual» eatery chain Fatburger, DBRS Morningstar has for the first time rated securities issued on a blockchain. Ethereum, to be precise.
As reported by Forbes on Sunday, the Toronto-headquartered ratings firm – which says it rates investment assets from over 2,600 issuers worldwide – actually rated a traditional debt security backed by franchise royalties and upfront fees coming in via Fat Brands companies, which also include Buffalo’s and Ponderosa Steakhouse.
However, the security was structured to include several Ethereum tokens in the investment process. With help from New York-based structuring consultant Cadence, ERC-20 tokens digitally representing the debt security were issued Friday to all investors’ wallets, with transactions logged on the Ethereum blockchain. Quarterly payments will follow in the same way, according to Forbes.
Morningstar reportedly said in its rating that using Ethereum would speed up access to data on the securities, as well as boost transparency.
For the blockchain side of the investment process, $40 million in $CDG, a stablecoin linked to the U.S. dollar, was held by the trustee, UMB Bank, while FAT Brands held other tokens representing two tranches of the debt security.
A smart contract completed the settlement of the trade, passing security tokens to the investors and $CDGs to FAT in transactions visible on blockchain explorers.
“It’s definitely the first rated securitization with a digital asset element, and we’re using it the way it was intended: to provide that level of transparency,» Nelson Chu, founder and CEO of Cadence, told Forbes.
Cadence has previously issued over 60 blockchain securities on Ethereum, though none were rated.
