At the Financial Review Innovation Summit, Digital Financial Instruments, a spin-off company of CMCRC Capital Markets Cooperative Research Centre (CMCRC) announced that they have developed and are testing a product similar to cash but for the digital world. The technology allows for real-time trading and settlement of a variety of financial instruments including cash, gold, equities and crypto currencies.
Professor Mike Aitken, CEO of the Capital Markets Cooperative Research Centre (CMCRC) and Australian Innovator of the Year believes this is better than Blockchain. As he explained, “I am not 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. In others words, in its current form, it doesn’t address the settlement problem at all.
But he does think that digi.cash the product created by Digital Financial instruments is better than Blockchain. As he stated, “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.
Digi.cash is a new asset trading system will allow a broad range of financial assets to be traded at virtually no cost with immediate settlement, potentially disruptive to existing markets like the Australian Securities Exchange. As explained, Digi.cash works via a system of “tokenisation”, where a digital representation is made of a physical asset. When the “token” is sent from one person to another, settlement is instant. The receiver can then “withdraw” the real asset.