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Evolving Capital Markets Part II: Exploring Blockchain-Based Government Bonds



Formal government bond markets date back to the 12th century, with the issuance of bonds by the Italian city states of Genoa, Venice, and Florence; and government debt markets more broadly date back to antiquity, with the governments of early civilizations such as ancient Sumer, Rome, and Greece issuing debt instruments to the private sector in order to finance public sector expenses. Over the millennia, government debt markets have advanced significantly. The formalization and standardization of bond markets, innovation in bond structures, introduction of derivatives, secondary market electronification, and primary and secondary market globalization have all contributed to the development of a global government debt market that is leaps and bounds beyond that which existed in ancient Sumer, Rome, and Greece. Regardless, despite the government debt market’s noteworthy advancements over the past few thousand years, much of the market remains as it always has been. Data corresponding to ownership, systemic risk, and participant-level risk still exists in silos, now in various databases instead of stone tablets; and trade, coupon, and amortization settlement processes still require complex and fragmented multi-party coordination to ensure finality. However, with the advent of blockchain technology-based market infrastructures, that may all be about to change.

Evolving Capital Markets Part I: Exploring Blockchain-Powered Market Infrastructures for Traditional Exchanges



Since the founding of the Amsterdamsche Beurs, the world’s first stock exchange, in 1602, asset exchanges have evolved into the global engine for capital markets activity and growth – providing a common venue to match buyers and sellers and achieve robust price discovery of assets. With the advent of bitcoin, the world’s first blockchain-powered network, in 2009, blockchain technology has experienced a meteoric rise in significance among capital markets participants. Widely regarded as the next evolutionary step for capital markets, blockchain-powered capital markets systems introduce novel and notable opportunities for asset exchanges to increase the effectiveness and efficiency of the capital market(s) they operate within. This paper will explore these opportunities, as well as the challenges associated with them, in an introductory manner.

This paper proposes how bitcoin-backed fiduciary currency could be implemented by Central Banks and the various consideration points therein. The paper draws comparisons from the proposed Bitcoin Standard to the Classical Gold Standard once implemented by most major modern economies throughout the late 19 and early 20 century.'s_Next_Frontier

NYC Coin: Municipal Finance's Next Frontier



This paper will explore the financial and technical feasibility corresponding to a New York City coin (NYC Coin). NYC Coin is a proposed asset to be issued by the New York City government, offering the public an opportunity to invest in the world's greatest city.

The global economy’s rapid digitization has made evident the many issues and opportunities that exist with financial system modernization. A key driving technology for this modernization has been distributed ledger technology (DLT). This paper will outline how central banks and governments around the world can implement minimum viable products with regards to value adding initiatives built for wide reaching financial and capital market systems utilization with distributed ledger technology. The first section in the paper will be introductory in nature and provide information on the different use cases available and compelling with regards to a focus on the financial sector. The second section in the paper will provide additional details and frameworks for implementing the most scalable and widely relevant use cases. There will be an emphasis on emerging market economies throughout the paper.

The document will explore the expected impact to financial markets from central bank backed real time gross settlement (RTGS) for securities and payments transactions.

The document will explore known and theoretical solutions for offline digital currency payments, in addition to their expected financial system impacts.

The document will explore several security and privacy considerations for a central bank digital currency (CBDC) deployment, outlining key issues related to how nodes communicate with each other and how each node operates individually.

Overall, the recent Bank of England paper displays peer-leading expertise on central bank digital currency. I personally applaud the Bank of England for its serious and literal commitment to exploring CBDC as a concept and its potential added value to the UK economy. Below are Satoshi Capital Advisors' general comments on the paper in addition to responses to the questions listed in Chapter 7.

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