Goldman Sachs Files Patent For “Cryptographic Currency For Securities Settlement”

According to a US Patent & Trademark Office application dated 19th November, Goldman Sachs has filed a patent application for “Cryptographic Currency For Securities Settlement”. The system is based on a new cryptocurrency called "SETLcoin" and will allow settling securities in financial markets using distributed, peer-to-peer, and cryptographic techniques, CoinDesk reported.

"Traders using the described technology exchange securities by presenting an open transaction on the associated funds in their respective wallets. SETLcoin ownership is immediately transferred to a new owner after authentication and verification, which are based on network ledgers within a peer-to-peer network, guaranteeing nearly instantaneous execution and settlement”, the application reads.

When an SETLcoin is first created there are no previous owners from which to verify ownership in the ledgers. In one or more embodiments, the issuer can maintain the same private key for digitally signing each SETLcoin as it is issued and entered into in the ledgers. That private key, in turn, can be validated by mutual agreement between the nodes, by a trusted third party (e.g., the SEC), or by one or more other security mechanisms, the document explains.

It further adds that an SETLcoin wallet holds multiple positionable items (e.g., a security item, such as a share), referred to as a Positional Item inside Cryptographic currency (PIC), and a position (i.e., a quantity of the PIC represented by an SETLcoin wallet). A PIC is an agreed upon reference used by the peer-to-peer network to refer to, e.g., a particular security and in some embodiments, it is issued by highly authoritative entities.

"However, the described technology can issue PICS based on various other techniques (e.g., network node agreement, exchange regulation, lease or purchase, auction, etc.) and can be named based on, e.g., a company's name, its market symbol, its branding, its security name, availability, or a preferred format (e.g., length, abbreviation, etc.)”, the application explains.

Moreover, SETLcoins are exchangeable for, e.g., other SETLcoins and/or other cryptographic currencies (e.g., peercoins), for example, a single IBM-S SETLcoin may be exchangeable for one or more "GOOG" SETLcoins (i.e., Google shares), for 13,000 USD SETLcoins, 100 litecoins, and/or for 5 bitcoins.