Datachain and JCB Successfully Validate PvP Settlements to Exchange Multiple Digital Currencies and Published a Concept Paper on Interoperability in the Next-Generation Finance

Datachain
4 min readApr 28, 2022
Datachain and JCB Successfully Validate PvP Settlements to Exchange Multiple Digital Currencies and Published a Concept Paper on Interoperability in the Next-Generation Finance.

Datachain and JCB have successfully validated PVP settlements exchanging multiple digital currencies. Based on this result, Datachain has organized the concepts of the verification experiment and published a concept paper on achieving interoperability in the next generation of finance.

This concept paper proposes a method for interoperability between blockchains, using a digital currency exchange infrastructure as the primary use case.

Datachain will continue to work with JCB to build a “digital currency exchange infrastructure” based on the methodology proposed in this concept paper. In addition, Datachain and JCB are looking for partners to jointly promote this initiative, including companies considering to be issuers or issuing platforms for digital currencies, financial institutions such as acquirers and PSPs, and operators of crypto-asset exchanges that provide liquidity for digital currencies.

Overview of the Demonstration Experiment and Background to issue the Concept Paper

As disclosed in the press release of December 2021, Datachain has been working with JCB on demonstration experiments for connecting different types of blockchains to establish a “digital currency exchange infrastructure.”

Through these experiments, Datachain and JCB aim to realize the simultaneous exchange of digital currencies (PvP settlement) so that a wide variety of domestic and foreign digital currencies, including stable coins, central bank digital currencies, and local currencies, can be used for payment at stores, etc.

Digital Currency Exchange Platform

Datachain and JCB Start Demonstration Experiment to Build a “Digital Currency Exchange Platform”

In this demonstration experiment, we have successfully realized PvP settlement of digital currencies on different blockchains, Hyperledger Fabric and Tendermint, without relying on third-party trust by building a digital currency exchange infrastructure.

The digital currency exchange infrastructure was built using IBC Proxy as an alternative verification module, and Hyperledger Lab YUI as each verification module. We also used IBC as the communication protocol between each blockchain and the hub, and Cross Framework for cross-chain transactions (simultaneous execution of multiple transactions across blockchains).

IBC Proxy

Hyperledger Lab YUI

Cross Framework

We have organized the results of these demonstrations and decided to publish them in the form of a concept paper.

We would like to hear opinions from a wide range of stakeholders and to conduct further demonstrations in collaboration with other companies interested in this project.

Concept Paper Overview

This concept paper, “Realizing Interoperability in Next-Generation Finance -Secure and Efficient Settlements between Multiple Digital Currencies-” proposes and organizes methods to realize interoperability, using digital currency exchange infrastructure as a primary use case.

As the digitization of finance progresses, it is expected that blockchain-based systems will be increasingly adopted and deployed in various domains such as settlement, securities, and trade. In such cases, it is unlikely that all systems will be integrated into a single blockchain, and we need to enhance interoperability among multiple blockchains or between blockchains and existing systems.

In light of the growing needs for interoperability, in this concept paper, we propose an interoperability methodology that can be applied to various use cases, utilizing IBCs to interconnect multiple blockchains, a proxy-type architecture for operational efficiency, and Cross Framework to achieve concurrent processing across multiple systems.

For more information, please visit the following URL.

Realizing Interoperability in Next Generation Finance
-Secure and Efficient Settlements between Multiple Digital Currencies-
https://datachainlab.github.io/realizing-interoperability-in-next-generation-finance.pdf

1. Background
2. Issues with Existing Methods to Achieve Interoperability
3. Proposed Methodology and Architecture
4. Use Cases (Exchange Platforms for Multiple Digital Currencies)
5. Discussing Methods in Use Cases
6. Other Envisaged Use Cases
7. Future Developing Topics
8. Conclusion

Future Initiative

In the future, Datachain will continue to promote the initiative to build a “digital currency exchange infrastructure” with JCB based on the methodology proposed in this concept paper.

Companies interested in this initiative (e.g., issuers of digital currencies, financial institutions such as acquirers and PSPs, and operators of crypto-asset exchanges that provide liquidity for digital currencies) are encouraged to contact us using the form below.

Twitter | Hyperledger Lab YUI | GitHub| Datachain

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Datachain

Core Contributor of LCP and Hyperledger Lab YUI, cross-chain interoperability solutions using the IBC protocol. https://twitter.com/datachain_en