Contents

About this paper

This paper outlines the value-add of Hyperledger as a permissioned blockchain and clarifies the role of distributed ledger technology, smart contracts, tokens, and additional Hyperledger contributions in the capital markets sector. In addition, the paper differentiates Hyperledger’s capital markets support from separate blockchain efforts related to cryptocurrency and informed, in some cases, by speculative media outlets.

Version 1.0 published in ?? 2019

This work is licensed under a Creative Commons Attribution 4.0 International License.

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About Hyperledger

Hyperledger is an open source effort created to advance cross-industry blockchain technologies. It is a global collaboration including leaders in banking, finance, Internet of Things, manufacturing, supply chains, and technology. The Linux Foundation, the nonprofit organization enabling mass innovation through open source, hosts Hyperledger. The Linux Foundation also enables a worldwide developer community to work together and share ideas, infrastructure, and code.

Acknowledgments

The Hyperledger Capital Markets Special Interest Group would like to thank the following people for contributing to this paper: Kelly Cooper, add your name 

About the Hyperledger Capital Markets Special Interest Group (SIG)

The purpose of the Hyperledger Capital Markets SIG is to discuss, research, and document ways Hyperledger contributes to the capital markets sector, specifically to the open-source blockchain projects in the Hyperledger greenhouse. 

Note that the Hyperledger Capital Markets SIG is open to all, and we encourage you to join our efforts. To learn more about this working group and find out how to participate, visit the Capital Markets wiki page.

Procedure for volunteering:

Ideally, the part that you volunteer for should be doable in an afternoon (about 200 to 300 words) and a subject you know about, or are willing to research from a variety of verified sources. Please list your name in the sections that need volunteers and include a tentative end-date. Include references used to create your material.

Introduction  

This document aims to address the opportunities and perceptions of the role of Hyperledger, blockchain ecosystems, and tokens in the capital markets sector. The concept for the paper emanates from conversation in the Capital Markets SIG regarding stakeholder varying interpretations of blockchain, distributed ledgers, smart contracts, and cryptocurrency. The paper intends to offer content that as a whole, or in sections, provides capital markets related definitions, taxonomies, use cases, product examples, and research references to support sector understanding and to promote Hyperledger solutions. The target audience is business stakeholders in and peripheral to the capital markets sector.

Trust  

CM sector and stakeholder obstacles or scenarios:

• Sharing of sensitive information such as board portals
• Improved accuracy and efficiencies to the voting and proxy assignment process
• Improved information transparency and shareholder participation

CM sector priority goals:

How Hyperledger contributes (business):

• Blockchain is a decentralized ledger managed by a network of users. Each user is identified by a unique digital signature and all transactions must be approved by a set of consensus rules before the block can be added to the chain; this is one reason why it is seen as so secure and reliable.

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Provenance  

CM sector and stakeholder obstacles or scenarios:

• Chain of custody
• Reduce the time from trade to settlement for securities and other asset classes

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Immutability 

CM sector and stakeholder obstacles or scenarios:

• Reduce settlement risk exposure and lower capital costs and systemic risk for the broker community

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Identity  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Data Integration  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Interoperability 

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

AML and KYC  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

GDPR  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Network Collaboration - Asset and Contract  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Tokens - Secure 

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Tokens - Cryptocurrency  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Analytics  

CM sector and stakeholder obstacles or scenarios:

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Audits

CM sector and stakeholder obstacles or scenarios:

• Document and reconcile complex and disparate information from multiple sources
• Audit strategies for complex systems, with auditors making decisions about what level of audit is required, how data should be captured, and the type of audit analytics needed.
• Reduce the auditor's role in checking and validating account transactions - moving them further up the value chain
• Automate elements of accounting and compliance and enable elements of the audit process to be completed with greater accuracy
• Highlight and investigate anomalies and unusual transaction patterns

CM sector priority goals:

How Hyperledger contributes (business):

How Hyperledger contributes (technology):

Related resources to address noted obstacles and goals:

Ethereum vulnerabilities - 

Additional blockchain ecosystem vulnerabilities -

Works Cited

Are auditors ready for blockchain? The audit profession is eyeing blockchain. Accounting Today. 2017;(9). http://search.ebscohost.com.ezproxy.umuc.edu/login.aspx?direct=true&db=edsgao&AN=edsgcl.502694087&site=eds-live&scope=site. Accessed August 26, 2019.