Distributed Ledger and Blockchain Technology Study Group
© ASC X9, Inc. 2018 – All rights reserved
Introduction
Distributed ledger technologies and associated applications are beginning to make inroads in the financial
services industry. The best known implementation, the Bitcoin blockchain, has been described as a “trustless”
network that enables value transfer among participants without the need for an intermediary or central verifier.
This innovation has been used to distribute new digital currency that is accepted for real world goods and
services. While digital currency itself may be transformative where it is adopted, distributed ledger technologies,
and in particular the main innovation of Bitcoin, the blockchain, extends into many other use cases that
traditionally rely on third-party transaction verifiers: payments, audit, brokerage, asset registry, and more. Nearly
all large financial institutions today are exploring applications of blockchain and other distributed ledger
technology (DLT). Moreover, many financial industry and technology firms are joining together to explore the
benefits of distributed ledgers delivered with blockchain technology.
In early 2016, R3 CEV (a consortium of international financial institutions) announced successful completion of
experiments to transfer value across separate ledgers. Similarly, the Linux Foundation launched the Hyperledger
Project in order to build an open source foundation for distributed ledger applications. As these efforts
demonstrate, appetite exists for cooperation across industries. The development of standards could facilitate
inter-operable, accessible solutions and accelerate innovation and adoption. Other experts have reached similar
conclusions.
1
Benefit of Standards
Standards can play several key roles in technology development. They can accelerate broader development and
adoption by allowing innovators to work independently while maintaining interoperability. They can help ensure
the quality and security of a solution by offering proven steps to eliminate or minimize potential weaknesses and
ultimately protect consumers and businesses from common vulnerabilities. For emerging technologies, standards
can create a marketplace for common and fully integrated applications.
The Study Group has concluded that Standards work specific to blockchain and distributed ledger technology is
warranted because of several factors:
1. Distributed ledger technology includes common elements that may benefit from standardization to enable
interoperable security, smart contracts, value transfer, etc.
2. The benefits provided by distributed ledger’s reduced frictions and shared accounting are best achieved
through agreement to use a single distributed ledger or interoperable technology with characteristics that
are commonly accepted by all participants. As most distributed ledger application development today is
within individual company silos and consortiums, X9 is positioned to advance innovation by identifying the
areas where standards and common architectures/practices support risk management that can benefit
the financial services sector as it adopts blockchain technology.
1
UK Government Chief Scientific Adviser - Distributed Ledger Technology: beyond block chain,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf and
Depository Trust and Clearing Company – Embracing Disruption, http://www.dtcc.com/news/2016/january/25/new-dtcc-white-paper-calls-for-
leveraging-distributed-ledger-technology.