Datachain and NTT DATA Successfully Verified Delivery Versus Payment of Digital Currency on Ethereum and Digital Assets on Hyperledger Fabric

by Motoki Yoshida February 1st, 2022
Datachain and NTT DATA Successfully Verified Delivery Versus Payment of Digital Currency on Ethereum and Digital Assets on Hyperledger Fabric

Datachain, with the cooperation of NTT DATA, successfully demonstrated that DVP settlement (* 1) using digital currency on Ethereum and digital assets on Hyperledger Fabric is possible.

By targeting Ethereum, which already distributes digital currencies (stable coins), and Hyperledger Fabric, which builds various enterprise services, the company successfully conducted a verification at a level closer to commercialization.

It will continue to promote commercialization effort in cooperation with NTT DATA.


Background

There has been a rapid acceleration in the commercialization of blockchain in the enterprise domain. Various digital assets such as electronic bills of lading (B/Ls), which are used in international trade, and digital securities, which are used to digitize stocks and real estate, are now traded on the blockchain.

In addition, there has been an increase in movements around digital currencies, such as Central Bank Digital Currencies (CBDC), which are being introduced in Cambodia and China, and privately issued stable coins such as USD Coin (USDC) (* 2) and Diem.

This has led to a growing demand for digital asset payments in digital currencies. In other words, it is increasingly necessary to transfer digital assets and digital currencies simultaneously.

In order to realize simultaneous transfer between different blockchains, it is required to interconnect two different blockchains (achieve interoperability) and execute transactions on both platforms simultaneously.

To address these challenges, Datachain conducted a demonstration experiment with the cooperation of NTT DATA to achieve interoperability between Ethereum, one of the world's largest blockchains used in various projects including digital currencies, and Hyperledger Fabric, which is used in services around the world as an enterprise blockchain, and to realize simultaneous transfer of digital assets and digital currencies (DVP settlement).


Summary of The Experiment

To start the experiment, Datachain chose digital assets on the Hyperledger Fabric and digital currencies on Ethereum (ERC 20 tokens such as USDC) to transfer value through DVP settlement. 

DVP settlement between Hyperledger Fabric and Ethereum

The company also uses YUI, a Hyperledger Lab that was initially contributed by Datachain, to interconnect Hyperledger Fabric and Ethereum for interoperability using IBC (* 3). In addition, it selected Datachain's Cross Framework to execute transactions on both blockchains simultaneously.


Results

Datachain successfully confirmed that two assets can be exchanged simultaneously by DVP settlement between digital assets on services built with Hyperledger Fabric and digital currencies on Ethereum.

DVP settlement between Hyperledger Fabric and Cosmos (Tendermint) has already been verified in the previous experiment. However, in this experiment, the company chose Ethereum, which is already used by digital currencies such as USDC (stable coins), as the connection destination for Hyperledger Fabric. As a result, it was able to verify the feasibility of commercialization at a higher level.

Based on the results, Datachain provided interoperability technology for a new trade settlement experiment jointly conducted by Tokio Marine & Nichido Fire Insurance Co., Ltd., STANDAGE Inc., TradeWaltz Inc. and NTT DATA Corporation.

Tokio Marine & Nichido, NTT DATA, Standage and TradeWaltz Jointly Conducted a Demonstration Experiment For a New Trade Settlement System (January 12, 2022)


Technical Achievements

(1) Using IBC to achieve interoperability between Hyperledger Fabric and Ethereum

Datachain confirmed it is possible to achieve interoperability between Hyperledger Fabric and Ethereum using IBC.

The module to connect the two blockchains using IBC (IBC Module) is currently available on OSS as YUI, a Hyperledger Lab.

The company used the multisig method for verifying blockchain. As for verification methods, it will continue to develop more efficient and trustless methods.

GitHub: https://github.com/hyperledger-labs/yui-docs


(2) Simultaneous execution of transactions on multiple blockchains with Cross Framework

By interoperating both blockchains and using the Cross Framework, Datachain successfully executed transactions on two different blockchains simultaneously.

Cross Framework is a framework developed by Datachain that enables cross-chain transactions. It is also available on OSS. The use case of DVP settlements using Cross Framework is patented in Japan (Patent No. 6982345).

GitHub: https://github.com/datachainlab/cross

Patent(in Japanese): https://www.j-platpat.inpit.go.jp/c1800/PU/JP-6982345/3830E874C2DCA6CAF9568C3FD630628425C54B71E54DD279B8730418D99F9EEF/15/ja


Future Initiatives

Based on this experiment, Datachain will continue to work with NTT DATA to commercialize the technology, including verification with operators.

If you are interested in DVP settlement using blockchain as well as trade settlement cases, please contact us from the form below.

https://form.run/@datachain-contact-en


*1 DVP (Delivery Versus Payment) Settlement: A settlement method that reduces principal risk by simultaneously delivering securities and other rights and making payments.

*2 ERC 20 tokens such as USD Coin (USDC): USDC is a stable coin tied 1:1 to the US dollar and has been increasingly used in recent years. ERC 20 is a standard for creating cryptocurrencies that are compatible with Ethereum.

*3 IBC: A specification standard being developed by the Interchain Foundation and Cosmos Project to ensure interoperability between blockchains.


Datachain, Inc. 

  • Date Established: March 12, 2018 
  • Main Business: Planning and development of products relating to blockchain technology
  • Representative: Tetsushi Hisata, CEO
  • Head Office:  3rd floor, Kurosaki Building, 4-1-4 Roppongi, Minato-ku, Tokyo
  • https://www.datachain.jp/



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