Investors Can Now Trade Ether and British Pounds on the Same Blockchain

A team of former Royal Bank of Scotland engineers is bringing trading and settlement of digital assets, including cryptocurrencies, to a private blockchain network originally developed for enterprise.

DASL is built on top of the Corda Network, the open-source blockchain system created by R3, a bank consortium that once personified the "Blockchain, not bitcoin" ethos of 2015-2016.

"Crypto is clearly converging with blockchain. We spent quite a lot of time in 2015 separating the two, to make sure we could have a conversation about blockchain, and now here we are converging the two back."

LAB577 is working with prime brokerage BCB, which will park its clients' assets, both fiat and crypto, with custodians; mirrored representations of these assets will trade on Corda, in a process known in blockchain parlance as layer 2 settlement.

In this way, investors will be able to conduct both legs of a trade, whether fiat-to-crypto or crypto-to-crypto, on the same system, and have them settle instantly and simultaneously, instead of waiting days for a bank transfer, or minutes for a public blockchain confirmation.

For prime brokerages, a core challenge of crypto is negotiating a host of network structures, wallets, proprietary blockchain protocols and so on.

The equivalent in the fiat world is physical bank accounts, which in the case of British pounds will be BCB's banking partner, ClearBank, said Landsberg-Sadie.

Two counterparties exchanging a bunch of litecoin, for example, would be unaffected by the transaction time of the public blockchain to settle.

Stepping back, settling the fiat side of trades on a blockchain instantly with cash on the ledger is an alluring proposition well beyond the crypto markets.

"In the case of trade finance, you want to have stores of value on-chain which the Marco Polos and the TradeIXs of the world can use," he said, referring to two blockchain networks in that market.