UBS plans blockchain project

Shortly after the release of the crypto futures, the major Swiss bank UBS announces a new platform on a block-chain basis. The aim is to make communication with other companies easier and more efficient.

The advantages for crypto trader are obvious

Banks that will use the Ethereum Smart Contracts for crypto trader to communicate in the future include Barclays, Credit Suisse, KBC, SIX, Thomson Reuters and UBS, as the latter announced in their press release today. The use of Smart Contracts is intended to make it easier to avoid scam for all participating companies to match the reference data of their legal entity identifiers with industry consensus.

This should make data reconciliation anonymous and more efficient. The project was launched in London and relates, among other things, to the forthcoming introduction of MiFID II and MiFIR at the beginning of next year. The two abbreviations each stand for draft laws designed to protect consumers and strengthen the financial markets.

To this end, the new laws require institutions to have a Legal Entity Identifier. One can imagine the same Legal Entity Identifier as a digital stamp, which receives basic information such as the address, name and date of incorporation of the respective company. This reference data also includes the industry classification and European Securities and Markets Authority identification codes and data. These data bundles can then be automatically matched and controlled using Smart Contracts.

“Typically, a company like ours performs quality checks on data from multiple sources, but we don’t have a reliable baseline for other representatives of our industry. By using blockchain-based smart contracts, data reconciliation for all parties can be done in near real time, anonymously, explains Christophe Tummers, Head of Data at UBS.

UBS works with Smart Contracts

The data synchronization follows the procedure typical for blockchains. The relevant data is encrypted and hashed, making it anonymous. The power of disposal over the data remains with the respective institute. Finally, the hashs migrate to the blockchain.

The Smart Contracts then compare the data with the prevailing consensus. The respective users always have the opportunity to gain insight into their own data.

At the moment, the project is still in the test phase – only non-sensitive data is compared. By the end of January 2018, however, the project should be ready to start.

So while banks and regulators are still divided about crypto currencies, the potential of the underlying blockchain technology is increasingly being recognized and used. The possibility of storing sensitive data anonymously and decentrally opens up numerous horizons. Apart from the widespread solutions in the financial sector, the use cases are in principle wide open. Similar proposals exist, for example, in the healthcare or legal sectors – we report.