A distributed ledger is an asset database that can be shared across a network of multiple sites, geographies or institutions.
All participants in the network can have their own identical copy of the distributed ledger.
Any changes to the distributed ledger are reflected in all copies in minutes, or in some cases, seconds.
The assets can be financial, legal, physical or electronic.
The security and accuracy of the assets stored in the ledger are maintained through the use of encrypted ‘keys’ and signatures to control who can do what within the shared ledger.
Entries can also be updated by one, some or all of the participants, according to rules agreed by the network.
Source: UK government Chief Scientific Adviser, 'Distributed Ledger Technology: beyond block chain', 2016.
- Banks well advanced in DLT applications
- "Mark Williamson, global COO of FX cash trading and risk management at HSBC, said that 90% of banks are now at proof-of-concept stage for distributed ledger technology (DLT) applications, with HSBC having settled billions of dollars of internal FX transactions on a DLT solution since February 2018."
- The Treasurer magazine, December 2018 / January 2019, p12