Post-Trade Giant NSD: Blockchain ‘Useless’ If Not Legally Binding

After nearly two years of experimenting with blockchain, the National Settlement Depository (NSD), Russia’s central securities depository, believes it now knows what incumbents must do to reap benefits from the tech.

The largest securities depository in Russia, the NSD has found that there are only a few cases where blockchain solutions can provide benefits over centralized alternatives, and that there are two criteria it uses for determining a ‘good’ distributed ledger use case.

According to the NSD’s director of innovation, Artem Duvanov, the first is that blockchains should only be used to record legally binding information.

“Blockchain is useless if it stores information that has no legal consequences,” he told CoinDesk in a new interview.

The remarks follow a number of smaller announcements from the NSD about its blockchain work in recent months. In April 2016, the NSD first revealed it had launched a distributed ledger trial, and by the year’s end, it had announced collaborations with two other global central securities depositories (CSDs).

Duvanov said that, through these trials, the NSD has determined a second criterion: that blockchain must be used as a tool to satisfy “non-functional requirements” in a multi-party environment.

He told CoinDesk:

“Centralized systems are inherently vulnerable

Read more ... source: CoinDesk

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