Even as the value of bitcoin fell from a high of $ 20,000 inlate 2017 to around $ 4,000 in late February 2019, according to Bloomberg, interest in the technology behind it grew. Blockchain, the distributed ledger technology used in bitcoin, has the potential to aid compliance in significant ways.
Digital distributed ledgers are databases of transactions that can be shared among participants and protected against piracy through cryptography. Any change in a transaction can be limited to the authorized parties. The identity of the parties and the changes made to any transaction are immutable recorded and visible to all parties in the chain. Therefore, distributed ledger technology can identify, even prevent, manipulation, fraud and corruption. This can benefit both regulators and the regulated.
Visit Also: Blockchain Services in UAE
National governments are starting to use blockchain to protect records. Sweden, Georgia and Ukraine are using it for real estate transactions and property records. The state of Delaware allows corporations to use blockchain for registration and transfer of ownership of shares.
Technology can also help companies meet growing government requirements aimed at combating money laundering and terrorist financing. These include know-your-customer provisions, which require banks to collect information about customers to identify potential criminals. That can be complex and costly for businesses and frustrating for customers.
Customers often have to send the same information to multiple banks involved in a transaction. Each bank individually encrypts that information to ensure data security and cannot share it with transaction partners.
Pilot projects are underway. In May 2018, banks HSBC and ING used blockchain to execute a transaction for a shipment of soybeans for Cargill. Because all parties were on the same blockchain platform, they were able to securely link and replicate records and maintain a tamper-proof audit rail.
Meanwhile, UBS has launched a pilot program to comply with the European Union Markets in Financial Instruments directive and rules. Bank son the Ethereum-based blockchain will be able to cross-reference data on legal entities.
Visit Also: Best Software Development Company in UAE
Companies could also use blockchain to audit the origin of goods. The Drug Supply Chain Security Act of 2013 requires pharmaceutical companies and their partners to closely monitor shipments. By 2020, pharmacies and hospitals should be able to verify that the drugs they dispense are from legitimate suppliers. Pfizer and other pharmaceutical companies are testing blockchain to track drug movements through their supply chains. The Food and Drug Administration announced in February 2019 that it was launching a pilot project to study new ways to secure the supply chain, including the blockchain.
US regulators are interested in how distributed ledgers can improve monitoring. At a conference at Georgetown University last fall, the chairman of the Commodity Futures Trading Commission spoke about the potential of blockchain. Regulations could be digitized and compliance integrated into companies' operations using smart contracts, said J. Christopher Giancarlo.CFTC computers could transmit regulatory requirements and automatically receive compliance data from companies.
For more information visit website Napollo.ae
