Invited Paper: Blockchain Design - A PFMI Viewpoint

Abstract

Blockchains (BCs) received significant attentions from FinTeh in recent years. Many proof-of-concepts (POCs) projects and experiments have been carried out to explore the strengths and weaknesses of constructing financial market infrastructures upon BCs. The experiments showed that considerable improvements are still necessary to meet financial requirements such as safety, efficiency, reliability, scalability, security and transparency. The Principles for Financial Market Infrastructure (PFMI), issued by the Committee on Payment and Settlement System (CPSS) and International Organization of Securities Commissions (IOSCO), is a key standard for designing Financial Market Infrastructures (FMIs) so that global financial markets could be more robust and stable, especially, could withstand financial shocks. It is thus necessary to design BC-based FMIs according to PFMI. This position paper analyzes financial system requirements and the challenges, and discusses the design issues of BCs in meeting PFMI.