We are excited to announce the global launch of SETTLENET, the settlement platform for the crypto asset OTC market. This settlement platform is perfect for crypto trading companies, exchanges, asset managers and brokers looking for faster settlement of OTC trades on a ticket by ticket basis and access to the Japanese crypto OTC market using our JPY fiat backed token.
SETTLENET has been over one and a half years in the making where Crypto Garage was chosen by the Government of Japan’s regulatory sandbox program in January 2019 for its unique settlement platform.
In this project, we worked to solve the problem of simultaneously settling a digital asset with Japanese yen backed token. Our demo application was tested and verified by the Japanese crypto exchanges and regulators and we completed and reported our sandbox program to the Government of Japan in January 2020.
What is SETTLENET?
SETTLENET is a non-custodial crypto asset OTC settlement application on top of the Liquid Network, a Bitcoin sidechain developed by Blockstream.
The main features of SETTLENET are:
- Non custodial: The users have control over their own assets without needing to deposit their assets to a third party.
- Instant Settlement: OTC transactions are done in a RFQ chat session and when an order is matched, the trade goes straight to settlement using atomic swap on the Liquid Network.
With atomic swap, each trading party can simultaneously exchange their assets without handing over control of their assets on the blockchain to a third party. Assets transacted on the Liquid Network are fully settled within 2 minutes. This allows traders to react to trading opportunities faster and take custody of their own asset. The average time to execute a transaction on the Liquid Network is 2 minutes.
What is the Liquid Network?
The Liquid Network is a sidechain based on Bitcoin technology that allows for the fast, confidential and secure transfer of Bitcoin and various digital assets between companies. Liquid is operated by a federation of members, which include exchanges, trading desks, and other cryptocurrency companies. Members collectively manage the network and guide its development. Bitcoin on the Liquid Network are verifiably backed 1:1 by bitcoin on the Bitcoin mainchain. This dynamic ensures that the price of bitcoin on the Liquid Network reflects the price of bitcoin originated on the main chain.
Since its launch in October 2018, the Liquid Network has 45 members, including cryptocurrency exchanges, market makers, brokers, financial operators and other crypto-asset-related companies around the world, with participants working in coalitions to manage and operate it to ensure that no single point of failure occurs.
What assets are supported by SETTLENET?
SETTLENET in principle support tokens issued on the Liquid Network that Crypto Garage has vetted to be qualified for SETTLENET. Currently, the supported tokens and asset pair available for settlement are below. More tokens and asset pairs are expected to be supported in the near future, such as Liquid USDt and L-CAD.
JPYS gives access to Japanese OTC crypto market
So far, entering the Japanese market has been difficult for many overseas crypto companies. In particular, a trade in physical settlement in Japanese yen tends to discourage new players, which involves the high cost of establishing a local subsidiary and opening a bank account. We provide a smooth and cost effective means of payment in Japanese yen in a fully regulation-compliant manner by offering a Japanese yen token that is held and available only to professional companies.
The Final Word
SETTLENET takes the existing functions in the Liquid network, such as atomic swap, issuing assets, multi-sig transactions and confidential transactions, and wraps them together for an off the shelf product. With SETTLENET, users can trade the listed assets on the Liquid Network without the worry of settlement counterparty risk. With the launch of SETTLENET, we would like more users to trade on the existing assets on the Liquid Network and encourage more asset issuance on the Liquid Network. If you are interested, please inquire us via email@example.com.
About Crypto Garage
Crypto Garage is a JV partnership of Digital Garage, Tokyo Tanshi and Blockstream. Digital Garage is a Tokyo Stock Exchange listed company. Tokyo Tanshi is a well established short term money market broker in Japan. Our technology has been developed under a strategic relationship with Blockstream, the world’s leading Bitcoin infrastructure company.