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Coinseeker

Smart Contracts for Retirement Account clearing - 401(k)

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The idea of using blockchains to disrupt the retirement industry, namely 401(k) and other retirement savings accounts isn't necessarily a new one.  My question is...how could you leverage smart contracts to eliminate the need for 3rd party clearing firms without putting the underlying 401(k) accounts at risk to volatility of say XRP?   It would seem to me as this would be a great use case for such.

Another way of asking that is to say...401(k) account holders already have an investment strategy for those funds and they don't want to take on additional risks of crypto fluctuations. One of the key pain points for example, is when an individual needs a disbursement from that account, a clearing firm (internal or external) is necessary to facilitate the trades and ensure the transactions complete smoothly.  How could smart contracts eliminate the need for external clearing firms, and allow companies with many billions of $ under management to bring that clearing in-house, without opening themselves and more importantly the account holders funds to crypto-market fluctuations.  (Meaning nil fluctuations)

Thoughts?

Edited by Coinseeker

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Interesting question.  I believe the DTCC is implementing this feature, so in this instance, it doesn't eliminate the need for the clearing house, but it does potentially automate it.  Doesn't specifically answer the question, sorry, but I don't think we are near the point of not needing 3rd parties yet.  Practically I think if it happens, it happens after adoption elsewhere builds trust?

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On 12/15/2018 at 6:12 PM, WrathofKahneman said:

Interesting question.  I believe the DTCC is implementing this feature, so in this instance, it doesn't eliminate the need for the clearing house, but it does potentially automate it.  Doesn't specifically answer the question, sorry, but I don't think we are near the point of not needing 3rd parties yet.  Practically I think if it happens, it happens after adoption elsewhere builds trust?

You could be right in your question.  I suppose automation is sufficient for now in that the goal would be to eliminate external 3rd party clearing and allow businesses to bring central clearing in-house, cheaply and efficiently.  For context, during the last administration, regulations were put in place that didn't allow companies that give retirement advice to be the same ones doing the clearing.  So they outsourced their clearing to 3rd parties. With the new admin, that regulation has been lifted so companies are looking to bring central clearing back in-house.  But it's easier to outsource clearing than it is to implement it.  My hope is that this is an opportunity to leverage smart contracts and other fintech to reduce costs and simplify implementing and maintaining (maybe asking a lot) internal clearing.

Where did you read about the possible implementation of such features?

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@Coinseeker here is the DTCC press release:

http://www.dtcc.com/news/2018/november/06/dtcc-enters-test-phase-on-distributed-ledger-project-for-credit-derivatives-with-markitserv

Just to be clear, R3 is the operative group here because they are setting up shop for all sorts of ledger uses, document tracking, notary, etc.  They are predisposed to use XRP for settlement, esp. cross border.

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