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Complete transparency will create a new paradigm for banking and business

For any system or service to work globally requires adherence to standard protocols that all participants accept and use. The more rigorous the protocol and the supporting technologies, the more effective the system. There are many protocols used in banking and business, e.g. TC/IP is a communications protocol that the Internet uses to ensure that a data packet from the orginator arrives at its destination. As Kariappa Bheemaiah - a tech blogger from Clermont Ferrand, France - in his excellent piece - see - explained “Today, along with HTTP, a whole suite of protocols like DNS and ARP, work together to provide us with the network experience we are used to. Email, Search Engines, Web pages, API’s and other Internet Services (SaaS, PaaS, IaaS) are all products that have evolved on this framework giving us today’s digital economy.”

New paradigm created by the Block Chain Value Exchange protocol

Bitcoin uses Block Chain, a Value Exchange protocol, that ensures that, in the decentralised Bitcoin network, every time a transaction occurs between the members, it is verified and validated so as to ensure that every transaction occurring within the network is between two individual accounts and that there is no risk of double spending. This is really is a brand new paradigm for payment systems - the exchange of value systems. It now makes it possible to operate completely decentralised networks in payment systems, there is no need for central clearing. 

Bheemaiah, points out that “The Block-chain protocol offers a similar foundation on which businesses can create value-added chains. Using the integrity lattice of the transactions, a whole suite of value trading innovations are beginning to enter the market.” He lists many examples, including:

  • ChangeCoin which offers a micropayment Infrastructure for the Web which changes the way readers can tip a blogger, etc.
  • Block Chain Application Programme Interfaces (API) to manage exchange of value in many different situations, e.g. instant payment when the dealing system confirms that the service or product has been delivered, i.e. there is no need for an LC or BPO
  • Smart Contracts in the legal system, e.g. Companies like Empowered Law use the public distributed ledger of transactions that makes up the Block Chain to provide Multi-Signature account services for asset protection, estate planning, dispute resolution, leasing and corporate governance. 
  • “Bitcoins are of digital assets, but since the Block Chain is a decentralized asset registry, it can also be used to register ownership and transfer of any digital asset besides Bitcoins. In this way, a digital bond could pay coupons and redeem the principal to the address holding the digital bond, without the need of custodians.”

Bheemaiah believes that the Block Chain is changing the way we will do business. He writes, “In Dec 2014, Don Tapscott, a leading authority on technology and innovation as well as a LinkedIn Influencer, did something characteristic of great men. He admitted he was wrong, noting: “Bitcoin… I used to think it would never fly. Now I think not only will it fly as a currency, but the underlying Block Chain technology of crypto currencies is a core part of the next generation of the Internet that is radically going to transform not just commerce and the nature of the corporation, but many of our institutions in society and everyone needs to pay attention to this.”

Marketcore ensures comprehensive deal transparency and fully understood deals

Marketcore provides a unique data processing environment for financial and insurance markets that provides:

  • more, and better quality information by incorporating updated risk disclosures throughout the life of a contract, all in real time 
  • identification of risks and patterns of risk in markets, a particularly useful feature in fractured markets and opaque financial products
  • improved price discovery and risk assessment in all financial and insurance products from first inquiry (pre-trade) through all secondary market transactions (post-trade) to final placement – even in the most complex products
  • continuous revaluation of both individual financial contracts and pooled securities
  • evaluation of the quality and quantity of risk data available for an instrument, providing a confidence metric for the instrument itself
  • identification of evolving, potentially systemic, risks.

Essentailly Marketcore keeps track of assets as they are transferred from buyers to sellers. More importantly, investors add information to those assets as they change hands. Also Marketcore uniquely rewards participants providing additional data on the deals/loans, so increasing investor confidence and lowering transaction costs. 

Complete transparency is at the heart of corporate governance, and risk management. MarketCore offers a new level of market visibility, understanding and control, but only if all participants adopt the system and provide the data to enable full transparency. 

In November 2008, the Congressional Research Service Report for Congress commented that “Marketcore identified the problems in the financial markets that led to the credit and liquidity crisis and devised a solution.” The Marketcore approach is pro-active and provides the full transparency that the regulators need. It is serious for the stability of the global economy that congress did not follow this up. 


CTMfile take: The full transparency that the Block Chain and the Marketcore technologies provide open up new ways of doing business and far greater levels of risk control. If we had had the Marketcore platform recording and reporting all sub-prime mortgage deals would there have been a global financial crisis in 2008? 

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This item appears in the following sections:
Best Practices & Benchmarking
Control & Compliance in Operations
FX Hedging & Risk Management
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