Digital Currency and Trade Systems Are Tearing up the Rules: We need a "digital Bretton Woods" to set standards




By Alex 'Sandy' Pentland

The next big thing in global commerce is "trust chain" digital platforms. Nations are now creating such platforms to allow businesses to execute transactions from anywhere on the planet securely and irrefutably. These platforms—which combine open alliance legal agreements (like Visa or Mastercard's legal agreements), distributed ledger technology (for example, blockchains like hyperledger), and end-to-end encryption—can handle not only payments but also finance, trade, tax, and audits in a uniform manner.

A well-documented example is Singapore's Project Ubin, sponsored by the country's monetary authority and its Temasek sovereign wealth fund, which is now being deployed after five years of testing and development. China has created similar systems that have already seen large-scale deployment, but which are less well documented. Another example is the Swiss Trust Chain (which MIT helped engineer); that platform is live but its commercial applications are still being developed.

Trust chains add a layer on top of existing internet protocols that transforms the internet from a loosely connected communication medium into a trusted transaction medium. They make it cheaper, easier, and safer to do business with anyone anywhere and anytime. Technologies such as AI, blockchain, and digital identity are aiding this transformation, helping to make software platforms better suited for a distributed world economy.

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