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Gu Yanxi: Opportunities for payment and clearing companies in the future digital financial ecology



In the future digital financial ecology, the infrastructure of the financial market must be based on distributed accounting technology. Distributed accounting technology supports direct transactions between point-to-point, that is, settlement, so at the same time as the transaction, the settlement is completed synchronously. Such a transaction settlement model no longer requires a separate third-party payment and clearing company to ensure the completion of clearing and settlement. Therefore, for the current payment and clearing companies, it is necessary to make corresponding adjustments in the future digital financial ecology.

Currently on a global scale, the largest payment clearing companies are Visa and Mastercard. Both companies have been very early on evaluating the impact of blockchain technology on their businesses and have also adopted proactive measures. For example, Visa and Mastercard originally planned to join the Libra Association. But later, due to very strong political pressure, they chose not to join for the time being. Whether they join or not, the fact that they plan to join the Libra Association shows how aggressive these two companies are in their plans to adopt blockchain technology. Obviously, these two companies have a clear understanding of the impact of blockchain technology on their current business, so they work hard to grasp the opportunities brought by this trend and make corresponding adjustments to ensure the continuous growth of their business. A settlement system based on distributed ledger technology will take some time to establish. Visa and Mastercard are well placed to assess the impact of this technology during this time and adopt strategies accordingly.

Gu Yanxi: The U.S. SEC’s elimination of regulatory uncertainty will help the more standardized development of encrypted digital finance: On December 23, Gu Yanxi, a researcher of blockchain and encrypted digital assets, published a column saying that the SEC’s lawsuit against Ripple is to be expected. The design of most encrypted digital currencies in the current market is very similar to securities products. In order to regulate this market, the SEC has been constantly emphasizing the definition of securities, which is commonly known as the Howey Test. He stated in the article that due to the SEC’s position on this matter and the measures it has continuously taken, the number of tokens generated in non-compliant ways in the US market has been greatly reduced. But this has not been eradicated, and non-compliant projects continue to appear in the market. But now it appears that the SEC is taking a systematic approach to address non-compliant projects in the market. Gu Yanxi pointed out in the article that the measures taken by the SEC are actually eliminating regulatory uncertainty, which will help encrypted digital finance develop within a more regulated range. Since the attributes of encrypted digital currencies such as Ripple have not been clearly stated by regulators before, various innovations in this area in the market have the risk of violations. Now that the SEC has clearly stated its position on Ripple, this will help the market to clarify its regulatory attitude, and the uncertainty in this aspect in the market will therefore be reduced. He finally said that from the perspective of the development trend of encrypted digital assets, more new digital assets will be generated in a centralized manner. An example of this is security tokens. However, tokens that are completely distributed in a distributed manner like Bitcoin and Ethereum have a relatively small chance of appearing. Therefore, Bitcoin and Ethereum are the most representative digital assets among assets generated in a distributed manner. Its uniqueness will be more prominent, and its value will therefore increase. [2020/12/23 16:11:52]

Gu Yanxi: Bitcoin will grow significantly in 2021: According to news on December 1, Gu Yanxi, founder of the American Liyan Consulting Company, said in the circle of friends that Bitcoin's new high is fundamentally different from the previous one. This time it is mainly the beginning of recognition by American financial and commercial institutions: Grayscale and Microstrategy have bought heavily, CME Bitcoin futures positions have become the highest, PayPal has begun to provide Bitcoin trading services to its users, and Fidelity provides Bitcoin custody services , The OCC clearly stated that the Federal Bank can provide legal services to encrypted digital currency companies. These factors all indicate that Bitcoin is becoming a mainstream asset class in the US market. In addition, Libra may be launched as early as January next year, which is also good news for Bitcoin. Bitcoin options positions in the trading market also indicate that the market expects Bitcoin to grow significantly in 2021. [2020/12/1 22:41:21]

One innovation triggered by blockchain technology is the introduction of digital currencies. With the support of financial market infrastructure based on blockchain technology, users can not only use digital currency for direct peer-to-peer payments, but also trade digital assets by means of transaction and settlement payment. In addition, due to the programmability of digital currency, more intelligent financial applications will be developed. These applications must also be based on the transaction-as-settlement settlement model. Therefore, in the future digital financial world, the current market demand for independent third-party clearing and settlement companies will be greatly reduced. The current payment and clearing companies must make corresponding adjustments to ensure the continued survival and development in the future.

Voice | Gu Yanxi: The blockchain has a fundamental impact on the securities industry: Recently, Gu Yanxi, president of the CBX Research Institute, said that the blockchain has a fundamental impact on the securities industry. He said that blockchain technology essentially supports transaction-based settlement. The most direct application in the securities industry is clearing and settlement. At present, they are completed by clearing and settlement institutions. In China, there is China Securities Regulatory Commission. DTCC and options trading have OCC. The biggest problem of the centralized settlement and clearing institution is its low efficiency and high cost, because it adopts a two-tier clearing system: the centralized clearing institution directly clears the clearing members, and these clearing members are usually first-class financial institutions and retail brokers. Customers are billed separately. The application of blockchain technology can allow trading users to settle directly, which does not require a centralized clearing and settlement institution, and the efficiency of the entire market will be greatly improved. In addition, blockchain technology can also have an impact on the primary market. In short, blockchain technology and encrypted digital assets can provide a more effective primary and secondary market. (Guosheng Blockchain Research Institute) [2020/2/18]

In Visa and Mastercard's response strategy, a very important step they are currently taking is to connect legal currency payment services with digital currency payment services, that is, while supporting legal currency and digital currency payment services, they also establish legal currency and digital currency. channels of exchange. In the process of providing such a service, payment and clearing companies such as Visa and Mastercard can gradually establish the infrastructure part of the future digital financial ecology. Therefore, they will continue to provide the infrastructure required for payment, clearing and settlement services, especially to ensure the simultaneous use of fiat currency and digital currency, as well as the infrastructure services required for the transition from the existing clearing and settlement model to the future settlement model.

In the transition from the current financial world to the future digital financial ecology, the evolution from a centralized computing system to a distributed accounting technology system is very important. What kind of distributed ledger technology is used is very important. However, if such a migration process is completed, non-blockchain technology factors are far more important than blockchain technology itself. I propose in my video tutorial that 95% of the factors that determine the success of a blockchain project are non-blockchain technical factors. Specifically in the field of payment and clearing companies, the current network of clearing companies, the scope of coverage, the number of merchants supported, the total amount of transactions per day, and the operations authorized by local governments, etc., all determine these payment and clearing companies. Whether it can continue to provide infrastructure services in the future digital financial ecology. At the other end of this type of market participants are entrepreneurial teams that provide blockchain technology. Although their technology can meet the needs of the future digital financial ecology, due to their lack of a solid business and user base, it is almost impossible to become a provider of financial market infrastructure in the future digital financial ecology.


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