Decentralized Payment Switch

Decentralized Payment Switch

.01 Context

The digitalization of finance through technology has brought about fundamental changes, the first of which is instantaneous, real-time transaction. The growing acceptance of blockchain has also created an expectation of transparency. Businesses and consumers are now expecting instant transactions which creates a settlement risk especially when sender and recipients are in different time zones, and clearing platforms. This credit risk known as Herstatt risk is netted by global banks via the CLS Group (a decentralized network) with RTGS at the local level.

.02 Situation

Financial institutions around the world are adopting instant local payment systems. Australia has moved to instant payment with SWIFT ML. In Europe SEPA payments are moving instantly with many banks. Cross border payments platforms are evaluating distributed ledger technology while a small number of banks are accelerating payments with the transparent tools in SWIFT GPI. In emerging countries the only instant payment available for merchants is cash or crypto.

.03 Problem

Today global real time payments are the exception, not the rule as settlements still go through money center banks or specialized intermediaries. Banks as these banks de-risk and step away from settling for some jurisdictions payments get delayed and lack transparency. The tech requirements and volatility of crypto make it impractical when they are legal.

.04 Solution

In a unique way, the WinstantPay wallet adopts traditional centralized networks of the SWIFT type, decentralized networks between correspondents and distributed channels of cryptocurrencies. The WinstantPay wallet promotes decentralized payment management while facilitating the collaboration of a bank with other financial institutions in the country or outside the country.

.05 Information

Cash transactions are decentralized. They are processed by the parties involved in the transaction without depending on an intermediary or a trusted third party. In the case of a $ 10 cash payment, the payer's account is debited. The recipient's account is then credited with $ 10. No central entity is required to process cash transactions because cash balances are physical. No one else will know that a transaction has taken place between the debtor and the recipient. Therefore, there is no central node and a transaction is only observed by the parties involved in the transaction.

.06 Functionalities

Stable coin for settlement

Winstant Galaxy

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