Abstract
Bitcoin and blockchain are widely discussed subjects among fintech companies and established players in the financial services sector. The nature of this technology can have a disruptive effect on financial services. This article focuses on aspects discussed less frequently in public including digitally agreed algorithms to accelerate processes, smart contracts and the privacy required to ensure only involved parties can see what they need to see. These aspects are illustrated here using a sample implementation of a few selected structures and processes needed for the digitalization of loan syndication using The Linux Foundation’s tool Hyperledger Composer .
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Notes
- 1.
Hyperledger Composer is one of the projects in the Hyperledger Greenhouse.
- 2.
In terms of different tranche types (junior, mezzanine and senior tranche).
- 3.
A special product variation consists of splitting the transaction into tranches like a CDO instead of a percentage share.
- 4.
API—application programming interface.
- 5.
The Hyperledger Composer supports Hyperledger Fabric 1.4, but does not use the new 1.4 functionalities (see Hyperledger, github, 2019).
- 6.
In Corda from R3, the approach is formulated from another point of view: “The only parties who should have access to the details of a financial transaction are those parties themselves and others with a legitimate need to know” (Brown, Carlyle, Grigg, & Hearn, 2016). In Hyperledger, this task is performed by channels or permissioned transactions.
- 7.
Other cloud providers like Google Cloud could work as well, but we have not tested them yet.
- 8.
Transaction written in JavaScript.
- 9.
Core—centralized online real-time exchange.
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Dahmen, G., Liermann, V. (2019). Hyperledger Composer—Syndicated Loans. In: Liermann, V., Stegmann, C. (eds) The Impact of Digital Transformation and FinTech on the Finance Professional. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-23719-6_4
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