Federal Reserve of Boston To Experiment with A Blockchain Supervisory Node
Earlier this month BitcoinExchangeGuide had reported a story about Boston Federal Reserve a whitepaper that deals with some of the problems the regulators will face around governing blockchain technology.
The most intriguing part of the whitepaper is the introduction of a new use case, a supervisory node. It is to be noted that “supervisory node” is a generic term and can include many roles beyond the Fed’s regulatory supervisor role, such as an auditor, payments network rule-enforcer, or data reporting entity.
It is worth noting that “supervisory node” is a generic term and can include many roles beyond the Fed’s regulatory supervisor role, such as an auditor, payments network rule-enforcer, or data reporting entity. As such, some of our questions and potential experiments are more generic and not necessarily tied to any of our specific roles as a regulatory supervisor.
Given below are some questions that the Fed wants to answer through this project.
- What business functions (audit, regulatory supervisor, payment network rule-enforcer) could supervisory nodes perform?
- What architectural questions do supervisory nodes create?
- When multiple blockchain platforms are utilized for a given business process (e.g., delivery versus payment, or DvP), what impact does this have on the supervisory node(s) architecture and performance?
- What can be done to detect and control malicious actors in a private payment network?
Boston Fed’s senior vice president Jim Cunha said:
“If you look at the future, there might be one blockchain that is holding securities, one that is holding derivatives, one is holding cash or interbank transfer — how do you as a supervisor watch the traffic on all these platforms that also will be on different technology?”
Cunha earlier quoted CFTC chair Christopher Giancarlo, who told the Senate Banking Committee in 2018:
“What a difference it would have made on the eve of the financial crisis in 2008 if regulators had access to the real-time trading ledgers of large Wall Street banks, rather than trying to assemble piecemeal data to recreate complex, individual trading portfolios.”