US Federal Reserve Board Releases Discussion Paper On Distributed Ledger Technology

In early December 2016, the US Federal Reserve Board's Divisions of Research & Statistics and Monetary Affairs released a discussion paper entitled "Distributed Ledger Technology in Payments, Clearing, and Settlement." The paper notes how digital innovations in finance, loosely known as Fintech, have garnered a great deal of attention across the financial industry. Distributed ledger technology (DLT) is one such innovation that has been cited as a means of transforming payment, clearing and settlement processes, including how funds are transferred and how securities, commodities and derivatives are cleared and settled. The paper examines how this technology might be used in the area of payments, clearing and settlement and to identify both the opportunities and challenges facing its practical implementation and possible long-term adoption. The authors state that DLT has the potential to provide new ways to transfer and record the ownership of digital assets; securely