Delete comment from: DSHR's Blog
Izabella Kaminska's How blockchain takes us back to medieval times starts:
"The marketing spiel about ... distributed ledger technology (DLT) often promises to liberate financial institutions from the costly burden of having to pledge billions of dollars in margin to clearing houses on the basis that trades complete instantaneously, meaning counterparty risks are eliminated.
But this, according to a new report by Greenwich Associates' Ken Monahan, is a wrong-headed way to think about things. Monahan, who in other respects is quite complimentary of DLT, notes that in most cases those savings arguments are moot. This is because what real-time gross settlement of securities offers with one hand it simultaneously takes away many times over with the other hand in terms of pre-funding costs."
The report points out the similarity between the various "blockchain instantaneous settlement" ideas and the economic disaster that ensued after the Venetian Senate mandated pre-funding of transactions in 1584.
Jun 16, 2019, 11:01:09 PM
Posted to The Economics Of Bitcoin Transactions