Blockchain Compliance Verification Network for Cross-Border Payments
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Solution Overview
Problem
Traditional blockchain networks face challenges in providing a straightforward approach for settling fiat currency transactions, often requiring multiple intermediaries due to issues with fungibility and exchange, especially in international payment transactions across borders.
Innovation Solution
A blockchain settlement network that utilizes tokenized value, such as stablecoins, to enable immediate availability of funds, allowing for off-chain transactions to be recorded on-chain, thereby simplifying the coordination and processing of monetary transactions while maintaining compliance with industry standards like ISO 20022, and facilitating cross-border payments without disrupting existing payment networks.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional blockchain networks are used for fiat currency transactions, then decentralization and security are improved, but transaction settlement speed and simplicity deteriorate due to multiple intermediaries and compliance complexity
Solution Approach 1:
The patent introduces a compliance verification module as an intermediary component within the blockchain network that automatically verifies jurisdictional regulations and compliance requirements. This mediator handles compliance checks internally, eliminating the need for multiple external intermediaries and manual compliance processes, thereby improving settlement speed while maintaining security through automated verification mechanisms
Solution Approach 2:
The patent changes the state parameter of value representation from traditional fiat currency to tokenized value (stablecoins). This parameter change enables immediate availability of funds and simplifies cross-border transactions by converting regulated fiat transactions into programmable token transfers that can be settled directly on the blockchain without traditional intermediary layers
2Reliability
If multiple intermediaries are used for cross-border payments, then compliance with jurisdictional regulations is improved, but device complexity and processing steps increase
Solution Approach 1:
The patent merges multiple compliance verification functions and jurisdictional regulation checks into a single integrated compliance verification module within the blockchain network. This consolidation combines what would otherwise require multiple separate intermediaries into one unified component, reducing processing complexity while maintaining comprehensive regulatory compliance through centralized automated verification
Solution Approach 2:
The compliance verification module performs self-service by automatically verifying jurisdictional regulations and compliance requirements without requiring external intermediaries. The module independently handles compliance checks, validates token transfers against regulatory rules, and executes settlements autonomously, eliminating the need for complex multi-party coordination and manual compliance processes
3Productivity
If tokenized value is used for settlements, then transaction speed and immediate fund availability are improved, but adaptability to traditional fiat currency systems may deteriorate
Solution Approach 1:
The patent implements a dual-function settlement system that can operate with both tokenized value (stablecoins) for immediate settlement and traditional fiat currency through the same blockchain network infrastructure. The compliance verification module and settlement mechanism are designed to be universal, supporting multiple value representations and transaction types, thereby maintaining adaptability to traditional systems while enabling faster tokenized settlements
Data Source
AI summary
An example operation includes one or more of capturing message content from messages between a sender and receiver which comprise information about a transfer of value from the sender to the receiver, detecting information about a compliance check within the message content which indicates whether the transfer of value complies with jurisdictional regulations, and recording the message content including the detected information about the compliance check via a blockchain.