I recently joined Sweetbridge to assist in the financial and regulatory issues faced by the new world of blockchain and cryptocurrencies.
Sweetbridge is an economic platform designed to free up the value that is locked in assets, commerce and the supply chains that comprise nearly two-thirds of the global economy.
Our economy is set up to fuse the vast promises of blockchain – the revolutionary technology that offers degrees of trust, transparency and seamless value transfer previously unavailable – with the real-world economy in ways that could unleash real GDP growth. This will be particularly applicable for SMEs and smaller supply chain entities, which could realize faster growth and lower costs from greater liquidity and faster payments.
Sweetbridge allows both individuals and companies to borrow from the value locked in traditionally illiquid assets and to conduct business in a more streamlined manner vis-à-vis existing intermediaries and counter-parties. This could unleash a wave of economic activity that would be otherwise locked away in the current system.
Our use of cryptocurrencies and blockchain will facilitate more efficient value transfers and settlements in commerce, all in a manner that is auditable and more easily visible to all parties involved. These include policy makers who can monitor and regulate transaction activity, allowing the private sector to significantly increase its activities while minimizing the numerous delays and financial intermediary costs inherent in today’s processes.
Sweetbridge’s technology consists of a stack of open-sourced blockchain based protocols that utilize both private permissioned blockchains and public transparent blockchains. We are sponsoring the development of these protocols to create an economy-wide accounting system that maintains a real time P&L and Balance Sheet based on a unified set of accounts.
These protocols will allows users to borrow money from their assets, settle payments, share underutilized assets and – above all – optimize supply chains. Our settlement and accounting protocols will allow businesses to mitigate counterparty risk, without the need for credit checks, letters of credit or upfront payments and traditional interest on the borrowing.
The heart of these protocols is a dual-currency economic system that includes a stable cryptocurrency that is asset-backed and a discount token which can be used to reduce fees charged in the system, including interest rates.
We see cryptocurrencies as an integral piece of our blockchain system as they free up assets, allow for liquidity generation and encourage users of the system.
Each local Sweetbridge entity conducts KYC / AML on their local members and ensures the entities within the local nation state follow the local laws of each country. Our system would not allow anonymous activity. Our protocols could assist in providing recourse, repudiation, identity, indemnification and transparency between parties.
Our inter-enterprise accounting system provides transparency to local regulators, tax authorities and law enforcement officers under the rules of each jurisdiction’s privacy laws. The protocol could even streamline the government’s collection of taxes at the transactional level and allow trade compliance to be enforced through smart contracts.
The difficulties faced by the new technology of blockchain and cryptocurrencies relates to the uneven and ill-defined regulatory environment within which our project can operate. While it varies by country, (and by state in the U.S.), the lack of regulatory clarity makes moving forward complex. This is particularly true given our desire to follow appropriate rules and regulations wherever we operate. As the technology and positive projects continue to develop, the regulators both nationally and internationally will be required to clarify their positions to enable the general economy to benefit from the power of this new technology.
For more information please visit www.sweetbridge.com.