With financial technology moving at hyper speed it had to happen. Just when we get used to Blockchain along comes the next best thing.
Mike Aitken, CEO of the Capital Markets Cooperative Research Centre (CMCRC) and Australian Innovator of the Year, described a new trading and settlement technology as «better than blockchain» at an Innovation Summit in Sydney this week.
The technology was developed by Digital Financial Instruments, a spin-off company of CMCRC. It allows for realtime trading and settlement of a variety of financial instruments including cash, gold, equities and cryptocurrencies.
Unconvinced on Blockchain
Aitken, who received the Prime Minister’s Prize for Innovation in 2016, said he wasn’t convinced about blockchain and that the practical use of Bitcoin’s blockchain in securities markets, particularly in settlement, was based on a misunderstanding of its purpose.
«For a start there is no concept of an issuer in Bitcoin’s blockchain and the distributed ledger is simply a movement from one ledger balance to another rather than a movement of value between one digitised asset and another,» said Aitken. «In others words, in its current form, it doesn’t address the settlement problem at all,» he added.
Viable Digital Cash System
The digital cash technology, which was launched by digi.cash last year, is digitally «minted» as electronically signed financial instruments, in this case coins and banknotes. These can be held on smartphones, computers or storage media.
Just like cash, online users can transfer financial instruments between each other via free, instant transactions. The encryption technology used means that the electronic financial instruments can securely circulate over public communication networks, without the risk of theft or counterfeiting.
«In the case of digital money products, digi.cash is actually minted digital coins and notes that you hold yourself, rather than an interface to an account balance being held elsewhere, this provides a number of important technology advantages, particularly when transferring or exchanging digital money,» Aitken said.
Ahead of its Time
Chairman David Skellern, who co-led the team that invented high speed WiFi in the late 1990s, says digi.cash is the most powerful and sophisticated financial instruments technology available in the world today.
According to Skellern the technology is an extension of the cryptographic protocols developed by David Chaum, who invented digital cash in the 1980s, and led its first implementation in the 1990's when it was way ahead of its time.
«The spread of smartphones has, for the first time, made a real digital cash system viable. The technology is very impressive and it is capable of moving us towards the digital money era,» said Skellern.
