Mercury Posted January 13, 2016 Share Posted January 13, 2016 (edited) I have been reading up on interbank currency markets, particularly currency union markets outside the US and EU simply because I am finding data on these markets much more accessible then their bigger cousins. Examples of currency unions are the East Caribbean Dollar, West and Central African Franc's. A common theme is a slow replacement of central brokerage with a bulletin board service (facilitated by the Central Bank). Commercial banks then advertise funds available for lending and to source funds for borrowing. Commercial banks negotiate on a bilateral basis for the use of excess funds in the banking system and set the terms and conditions of each loan without the intervention of the Central Bank. In the conduct of Interbank transactions, commercial banks can either enter into informal unsecured agreements, or can choose to enter into secured arrangements, whether by offering collateral or by repurchase agreements. (Taken from the ECCB, although the others mirror similar language http://www.eccb-centralbank.org/Money/index.asp). Lets say ILP is adopted, I assume it would be a secured arrangement (via crypto) without the need of collateral or agreement (beyond rate guidelines of a central bank)? I know Ripple has made the note on how much potential savings there could be from freed monies that are currently locked up in these types of collateral agreements, but its one thing to be told and another to see the numbers (as much as can be seen by outsiders). The reason I ask is because most of these markets are explicit on what is and isn't a secured arrangement, but obviously these regulations were laid down prior to cyrpto secured transactions, and I am not sure if it falls into the category (or perhaps as a quasi agreement, or perhaps new rules would have to allowed). Edited January 13, 2016 by Mercury tommytrain 1 Link to comment Share on other sites More sharing options...
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