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Hyperledger has launched a Special Interest Group ("SIG"), the Hyperledger Capital Markets SIG, to facilitate focused technical and business-level conversations related to appropriate use cases for blockchain technology across Capital Markets.
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Capital Markets are a way to connect investors and borrowers. Borrowers get access to capital and investors get returns from their investment. These returns can be in the form of dividends, coupon payments or appreciation of the instruments. The downside risk is default by the borrowers as well as the reduction in the price of instruments. Borrowers are enterprises or governments. Investors are individuals or public and private institutions. Capital markets are an important component of the economy. Capital markets include the bond market (the largest market) and the stock market. It can also include derivatives.
When invented, the Blockchain was aimed at global uncensored retail payments through the medium of a digital currency. The original solution has since evolved into a store of value and its exchange among participants in a safe, secure and transparent manner. Many Blockchain solutions have been created to cover issuance and transfer of digital assets, futures and other derivatives. In other words, addressing many of the concepts underlying capital marketsThis and other solutions feature capital markets infrastructure and processes.
The Cambrian explosion of Blockchain solutions covers includes public permissionless to private permissioned. Many of these solutions are in the capital markets sector. Hyperledger houses the most diverse set of primary blockchain frameworks, utilities and libraries. The new SIG helps unify thinking and solutions targeted to capital markets in Hyperledger. In the spirit of the SIG, the CM-SIG is a forum where capital markets business experts and blockchain technical folks come together in a free and open-source manner.
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- Draw out front to back taxonomy for generic capital market infrastructure with variations on specific product lines
- Impact of dlts and their place in the architecture (business, integration, infrastructure, regulation, market events, interaction between product lines)
- Risk calculation and scenario analysis: analytical impact of Distributed Ledger Technologies ("DLTs") in pre-market, trading, hedging, day-to-day risk management, trading limits, FRTB,
- Specific use cases, current pilots and proofs of concept, and production case studies with opportunities and risk; as well as solutions for the identified problems
- Cross-cutting architectural principles, performance and scalability, security, identity management, off-chain data, deployment and operation in regulated enterprises;
- Standards in capital markets for data in flight and at rest, events and responses, privacy in light of DLTs
- Conferences or meetups to connect face to face, submit papers, talks, presentations
- Interface with companion SIGs like Trade Finance or Supply Chain to draw out common areas of concern and interactivity of solutions
- Functional knowledge drawn from SIGs like telecom, best practices from SISIG (what does it stand for?from Social Impact SIG (SISIG) as well as the knowledge drawn from Architecture, Identity and Performance and Scale Working Groups
The new Hyperledger Capital Markets SIG, is led by the chair Vipin Bharathan, Founder , dlt.nyc, a blockchain consulting firm, and vice chair Natalia Garcia, Assistant Director in Debt Capital Markets, and is comprised of more than 21 founding individuals from different locations, from diverse financial institutions. SIG membership and participation has grown since and is open to all. We have already had several audio calls and are involved in some projects that the community has found interesting.
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- Taxonomy, classifying the dimensions of capital markets,
- One on standards as there are standards Standards covering the different tyes types of products
- Use cases, listing the prominent use cases- a draft taxonomy of use cases is available
- Challenges or obstacles that are common to digital ledger technologies DLTs and their particular application to capital markets use cases
- Regulations that apply to the various aspects of this highly regulated industry
- ROI of any particular solution, especially on intangible aspects like trust, transparency and decentralization in capital markets
Greater details on any one of these can be found through our projects page.
It is through the CMSIG is aimed at working together discovering correlation between these projects and working together that we will be able to deploy actual solutions from the Hyperledger greenhouse inside capital markets.
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