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The commercial potential of blockchain and digital currencies


More transparency, traceability, and security can create tangible improvements to financial services and international transactions.

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Blockchain networks hold tremendous power in their ability to boost security, which can help ensure data integrity, promote transaction and settlement efficiency, and verify identity.

However, many current business applications of blockchain are still in experimental stages. Use cases range from academic research experiments to the eventual issuance of central bank digital currency.

Although mainstream adoption of blockchain applications is nascent, it’s advancing swiftly. Numerous blockchain experiments for international payments have been conducted in recent years. And virtually all of them fall into three design patterns, which are reviewed in this report: the custodian model, the correspondent model, and the digital asset model.

One problem with the digital asset model can be a lack of confidence in the underlying digital asset. Legitimate questions arise about who controls the exchange rates for digital currencies, resurfacing fears of foreign exchange market manipulation and concerns for liquidity provision.

The traceability of blockchain can help prevent financial crimes such as money laundering and corruption, and the efficiency of blockchain will reduce transaction and settlement frictions.

This report explores how blockchain, as well as “altcoin” alternatives such as Bitcoin, can help create a future of programmable money.


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Meet the authors

Jesse Lund

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, Vice President, Global Blockchain Market Development, IBM Financial Services Sector


Jed McCaleb

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, Stellar Cofounder and Chief Technical Officer


Lindsay Lin

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, Counsel and Program Manager, Lightyear.io



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