Large Banks Launched an Ethereum Data Compliance System
December 14, 2017
While regulators are imposing more and more sanctions on the cryptocurrency industry, authoritative banks have conducted a pilot testing of the data compliance system based on Ethereum platform technologies.
The Massive Autonomous Distributed Reconciliation platform, better known as Madrec, is a project created by the largest Swiss bank UBS together with Barclays, Credit Suisse, KBC, SIX and Thomson Reuters. This development is designed to facilitate the process of ensuring compliance of a wide range of counterparties' data for the banks.
As a rule, firms under regulation use "legal entities' identifiers" that are stored in the international database. These identifiers are used to make transactions on behalf of their clients, even though they do not have any codes prescribed for them. However, from January 3, next year, every legal entity in the EU will be required to have these codes.
The purpose of Madrec is to ensure the security of private data and their compliance among the parties.
The project is known to have already been developed for six months. According to the plans, this network, based on smart contract technology, will be designed to integrate identifiers approved by the Legal Entity Identifier Regulatory Oversight Committee.
The system will encrypt confidential data in the Ethereum Blockchain, while the information itself will not leave the departments. Smart contracts will verify the compliance of these data and quickly identify them.
According to Peter Stephens, the head of UBS's blockchain research and development efforts, banks face a common challenge, and Ethereum will help them solve it. Stephens noted that Madrec should not be considered an object for competition and all European banks should join their efforts for the further development of this system.
One should recall that earlier the head of the Swiss bank spoke about his liking to the popular technology. Besides, another blockchain project of the organization, Batavia, came to be known at that time.