A team of former Royal Bank of Scotland (RBS) blockchain engineers and researchers has launched a platform for the trading and settlement of digital assets in collaboration with a London-based prime brokerage.
Interviewed by CoinDesk, Richard Crook, former RBS innovation director, together with his team called LAB577, have developed a platform offering - the Digital Asset Shared Ledger, or DASL (pronounced "dazzle") - built upon Corda Network, the open-source public blockchain system developed by banking consortium R3.
LAB577 is working alongside prime brokerage BCB, founded in 2017 by Oliver von Landsberg-Sadie and Oliver Tonkin to specialize in the trading of digital assets. Through the DASL platform, BCB will be the first digital asset prime brokerage to offer trading services over the Corda Network.
DASL's shared ledger helps provide high-speed bi-lateral transactions with full privacy between parties. BCB will hold clients' assets - fiat and cryptoassets - as custodian, while mirrored trades will be conducted on Corda.
This arrangement - known as layer 2 settlement - will enable clients to conduct both legs of a trade - whether fiat-to-crypto or crypto-to-fiat - on the same system, reports CoinDesk. Thanks to Corda's in-built interoperability with other business networks, trades will settle instantly and simultaneously.
The news outlet reports that BCB already have a pipeline of clients to bring to the new network, including a couple of large banks, and is currently live with a couple of beta clients settling ethereum and pounds sterling.
Regulatory Risks Mitigated
Bringing brokerages to such networks helps mitigate one of the primary risks seen in the cryptoasset market - that of regulatory risk. Brokerages must already have a trading license, meaning they are already compliant with anti-money laundering and consumer protection rules.
Crook added in the Coindesk interview:
DASL wants to assist those regulated financial institutions to be able to deal with digital assets.
Lansberg-Sadie said in a BCB press release, dated August 1, added that one of the greatest barriers to entry into the digital assets markets for financial institutions was the uncertainty stemming from settlement and security risks. He added:
We identified LAB577’s Corda-based DASL solution as the most robust and credible way forward for trading and payments that not only mitigates those risks but also provides a scalable framework for the much more sophisticated financial instruments which lie ahead.
David E Rutter, chief executive of R3, said he believed Corda was the ideal home for such "next generation" markets, as it offered trading under the highest levels of privacy and security. He added:
We’re confident that tokenisation has potential to make rapid improvements to the way markets operate. BCB Group’s work is making a significant contribution to this by setting up key brokerage infrastructure, making these nascent markets more appealing to investors.