Blockchain Innovators Introduce Peer-to-Peer Debt Clearing System to Bypass Banks
A new initiative from Informal Systems, a blockchain infrastructure firm with roots in the Cosmos Network, is set to challenge traditional financial systems by enabling direct peer-to-peer debt clearing.
This initiatie introduces a peer-to-peer system aimed that allows individuals to settle debts without relying on intermediaries like banks or clearinghouses. The system, named Cycles, is designed to offer a decentralized alternative to traditional clearing methods, which are vital for secure payment transfers and liability settlements in traditional finance.
Ethan Buchman, CEO of Informal Systems, highlighted that while blockchain technology has focused on assets, the liabilities side has been largely overlooked. Cycles aims to address this by using atomic multilateral settlement, which can clear debts more efficiently and with lower costs.
The system is designed to support multiple currencies, enabling users to benefit from the clearing process even if they don’t use the same currency.
READ MORE:
Brazil’s CBDC Set to Revolutionize Cross-Border Trade with Blockchain and AIIn the system, users can transfer assets like Bitcoin through bridges such as Nomic to the Cycles network, facilitating the clearing process. Buchman emphasized that, unlike traditional bank clearing systems, which benefit from liquidity savings, Cycles could offer these advantages to individuals and businesses, reducing cash flow stress and working capital costs. The first version of Cycles is expected to launch in 2025.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
D.O.G.E. comes into effect by order on Day 1 of Trump Office
Ripple vs SEC: John Deaton Says SEC Appeal Likely to Fail
Deaton believes that the appeal of the SEC is weak. In the past, Judge Torres decided that the SEC did not meet certain requirements.
Vivek Ramaswamy exits DOGE role as Elon Musk takes control
Ramaswamy leaves DOGE for possible Ohio bid as Musk spearheads federal streamlining.
SEC unveils crypto task force led by ‘Crypto Mom’ Hester Peirce to forge new regulatory path
The new task force aims to avoid regulation by enforcement and will cooperate with other US agencies.