Could the distributed ledger technology serve as the basis for a new kind of electronic negotiable instruments?
Abstract
The author of this paper proposes to use distributed protocol technology (DLT) to create a new system of electronic negotiable instruments, in which the drawing, transmission and presentation for payment of bills of exchange, cheques and promissory notes would be carried out through transactions within a private blockchain governed by the Libra protocol. The creation, modification and extinction of securities would be carried out by smart contracts (modules) located in the account of the Royal Spanish Mint (in the case of bills of exchange) or in the accounts of private banks (in the case of cheques). The securities’ data would under no circumstances be made public and avalaible to third parties. Instead, their content would be concealed by means of various obfuscation techniques. Although, for reasons of space, only the case of bills of exchange has been mainly analysed and researched, the schemes presented in this paper would be fully applicable to all securities and negotiable instruments.
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