“Better Than Blockchain”: Digital Financial Instrument


Friday, September 22, 2017  10.30AM / Mondo

Professor Mike Aitken AM, CEO of the Capital Markets Cooperative Research Centre (CMCRC) and Australian Innovator of the Year, described a new trading and settlement technology as “better than blockchain” at an Innovation Summit in Sydney this week.

The technology was developed by Digital Financial Instruments, a spin-off company of CMCRC. It allows for realtime trading and settlement of a variety of financial instruments including cash, gold, equities and crytocurrencies.

Professor Aitken, who received the Prime Minister’s Prize for Innovation in 2016, said he wasn’t convinced about blockchain and that the practical use of Bitcoin’s blockchain in securities markets, particularly in settlement, was based on a misunderstanding of its purpose.

“For a start there is no concept of an issuer in Bitcoin’s blockchain and the distributed ledger is simply a movement from one ledger balance to another rather than a movement of value between one digitised asset and another,” he said. “In others words, in its current form, it doesn’t address the settlement problem at all."

The digital cash technology, which was launched by digi.cash last year, is digitally 'minted' as electronically signed financial instruments, in this case coins and banknotes. These can be held on smartphones, computers or storage media. Just like cash, online users can transfer financial instruments between each other via free, instant transactions. The encryption technology used means that the electronic financial instruments can securely circulate over public communication networks, without the risk of theft or counterfeiting.

“In the case of digital money products, digi.cash is actually minted digital coins and notes that you hold yourself, rather than an interface to an account balance being held elsewhere,” Aitken said. “This provides a number of important technology advantages, particularly when transferring or exchanging digital money.”

Chairman Dr David Skellern AO, who co-led the team that invented high speed WiFi in the late 1990s, says digi.cash is the most powerful and sophisticated financial instruments technology available in the world today.

“The technology is an extension of the cryptographic protocols developed by David Chaum, who invented digital cash in the 1980s, and led its first implementation in the 1990s when it was way ahead of its time. Two of our founders were involved in that first implementation.,” he said. “The spread of smartphones has, for the first time, made a real digital cash system viable. The technology is very impressive and it is capable of moving us towards the digital money era.”

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