Distributed Ledger Technology in Payments, Clearing, and Settlement

Badev, Anton; Baird, Maria; Brezinski, Timothy; Chen, Clinton; Ellithorpe, Max; Fahy, Linda; Kargenian, Vanessa; Liao, Kimberley; Malone, Brendan; Marquardt, Jeffrey C.; Mills, David C.; Ng, Wendy; Ravi, Anjana; Wang, Kathy

doi:10.17016/FEDS.2016.095

Working Paper

Distributed Ledger Technology in Payments, Clearing, and Settlement

Abstract: Digital innovations in finance, loosely known as fintech, have garnered a great deal of attention across the financial industry. Distributed ledger technology (DLT) is one such innovation that has been cited as a means of transforming payment, clearing, and settlement (PCS) processes, including how funds are transferred and how securities, commodities, and derivatives are cleared and settled. DLT is a term that has been used by the industry in a variety of ways and so does not have a single definition. Because there is a wide spectrum of possible deployments of DLT, this paper will refer to the technology as some combination of components including peer-to-peer networking, distributed data storage, and cryptography that, among other things, can potentially change the way in which the storage, recordkeeping, and transfer of a digital asset is done.

https://doi.org/10.17016/FEDS.2016.095