Digital Financial Instruments, a spin-off of Capital Markets Cooperative Research Centre (CMCRC) based in Sydney, has developed a new trading and settlement technology that may be about to change the financial landscape.
The technology, described by CMCRC’s CEO, Professor Mike Aitken AM as “better than blockchain”, allows for real-time trading and settlement of a variety of financial instruments including cash, gold, equities and cryptocurrencies.
A blockchain skeptic when it comes to the practical use of Bitcoin’s blockchain in securities settlement, Professor Aitken, who received the Prime Minister’s Prize for Innovation in 2016, said that blockchain 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. In other words, in its current form, it doesn’t address the settlement problem at all.
The digital cash technology developed by Digital Financial Instruments uses an encryption system that allows electronic financial instruments to securely circulate over public communication networks, without the risk of theft or counterfeiting.
The technology, launched by digi.cash in 2016, is digitally ‘minted’ as electronically signed financial instruments – in this case coins and banknotes that can be held on smartphones, computers or storage media. Just like cash, online financial instruments can be transfer between users via free, instant transactions.
“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. This provides a number of important technology advantages, particularly when transferring or exchanging digital money,” Professor Mike Aitken added.
Dr David Skellern AO, Chairman at CMCRC and one of the creators of high speed WiFi in the late 1990s, agrees that 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.
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.