On Tuesday, January 28, two important banks Goldman Sachs and Citi Group held; silently; a first class transaction. This transaction is nothing more than the first Swap of actions in one of the first Blockchain of the crypto ecosystem. Nothing more and nothing less than in the Ethereum blockchain network.
Blockchain makes its way
Unlike traditional Swaps; in which the values must be constantly updated for an endless number of different variables; as dividend payment, variable interest rates. With the use of Blockchain technology, all this remained in the past.
The new Swaps platform built on the Ethereum Blockchain backed by Axoni. Ensures that each agent in the transaction; be one or three hundred; have exactly the same information, and that both use it without any error.
And, when you are one of the largest banks in the world, and you move billions of dollars annually; You have to use the best, and fastest solutions, to constantly check every step, every process. Well, no penny can be left to chance.
When things go wrong, it is because the numbers in one bank do not match the numbers in another, those small problems can cause you to lose work days and millions of dollars in each transaction.
The transaction mentioned between these two giants of the “traditional” world, or not so much. It was based on an exchange of the total return on a share, in which one of the two banks agreed to cancel it based on another underlying asset; while the counterpart paid based on a fixed rate of return.
To achieve this continuous feedback from all parties equally. CitiGroup integrated into its pre-designed infrastructure, a dApp built on the Ethereum Blockchain; called Axcore from Axoni. In it you can customize any number of Swaps.
The thing works like this. Like Bitcoin, for transactions to remain in a constant state of verification and updating, each counterparty must also execute its own node.
Even Axoni executes specialized nodes that work with the other nodes of each counterpart to help the wider network reach consensus. However, Axoni nodes are divided from the actual data of the transaction, which gives each company valuable ownership of its own data. Feature that is extremely important; and it is the reason why these two important banks relied on this dApp to do the operation.
Another feature is that it does not require the use of ETH at any time during the transition. What causes the network to be less decentralized than Bitcoin; and other public block chains. At the time of launch, more than ten nodes were running, according to the companies.
Is this the future of banking?
Right now, traders of these operations are expected to comply with existing regulatory obligations.
Experts believe that in the future regulators themselves may have access to a “Regulatory Node”. Which would grant direct and real-time access to transactions. Further reducing paperwork, and eliminating the need for expensive employees and organizations that process that paperwork.
Economics student of the UCV. Defender of individual freedoms and of course also of the market and cryptocurrencies.