Featured Product

    BOJ and ECB Report on Phase 4 of Research on DLT Under Project Stella

    February 12, 2020

    BOJ and ECB have released outcome of the phase 4 of their joint research on distributed ledger technology, or DLT, under Project Stella. The phase 4 of Project Stella outlines the fundamental features for ensuring the confidentiality of transactions and assesses whether auditing could be done effectively even when confidentiality is ensured. The results can be used as a starting point for choosing privacy enhancing technologies or techniques (PETs) and designing auditing processes for transactions.

    Over the past years, a number of solutions have been developed to cater to the privacy and confidentiality aspects that arise as a result of the sharing of transaction information in distributed ledgers. These solutions focus, for example, on limiting access to information by unauthorized parties and are generally known as PETs. The use of PETs may pose challenges, however, when third parties need to view and interpret the transaction for auditing purposes. To ensure accountability, the level of auditability aimed for in payment and settlement systems based on distributed ledger technology should be similar to that in centralized systems. This is applicable regardless of the different types of settlement assets, including stablecoins, central bank digital currency, and others.

    Against this background, Stella phase 4 explores—through conceptual studies and practical experimentation—how confidentiality and auditability could be balanced in a distributed ledger environment. It assesses the way in which PETs would ensure confidentiality as well as the arrangements that accommodate effective auditing for transactions in a financial market infrastructure based on distributed ledger technology. Stella phase 4 proposes that the auditability of transactions in a financial market infrastructure based on distributed technology using PETs can be assessed from the key perspectives of accessibility to necessary information, reliability of the obtained information, and efficiency of the auditing process. Additionally, Stella phase 4 raises points for further consideration when expanding the discussion on balancing confidentiality and the auditability of transactions for practical application:

    • It notes that the reliance on a trusted source could pose single point of failure risks for the network.
    • When multiple PETs are used in combination, there could be a trade-off between enhancing confidentiality and effective auditability.
    • When the model accommodates multiple payment and settlement systems as well as multi-tiered payment systems, it would be necessary to coordinate different standards and processes between systems.
    • The inclusion of end-users may increase the complexity of managing the confidentiality of end-user information and necessitate the creation of appropriate standards to determine the transactions to be audited.

    Keywords: Asia Pacific, Europe, Japan, Banking, Insurance, Securities, PMI, FMI, Project Stella, Fintech, Blockchain, Distributed Ledger Technology, EU

    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521