Distributed Ledger Multi-Currency Clearing Scalability

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Solution Overview

Problem

Existing bank-based blockchain payment networks face challenges in scaling due to their reliance on a single entity for liabilities, making it difficult to manage risk and business operations across multiple entities.

Innovation Solution

A distributed ledger system that allows multiple and distinct entities to participate in multi-currency clearing and settlement, using a permissioned distributed ledger with nodes associated with participant banks and a liquidity provider, and employing consensus algorithms and smart contracts for secure and efficient transactions.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If a single entity is used to hold liabilities in a blockchain payment network, then risk management and business operations are simplified, but the system cannot scale to multiple entities

Engineering Contradiction:

Improvescalability to multiple entitiesVSAvoidsystem complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The patent segments the liability management function by introducing multiple liquidity providers, each maintaining their own deposit accounts on the distributed ledger. This allows the system to scale from a single-entity model to a multi-entity model by dividing the liability-holding function across independent participants, thereby improving scalability without requiring complete system redesign

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The distributed ledger acts as an intermediary layer that enables multiple entities to participate in the payment network while maintaining standardized liability management. The ledger provides a neutral platform where liquidity providers and participant banks can interact through consensus algorithms, facilitating multi-entity participation without direct complex bilateral relationships

Inventive Principle:

Principle #24Intermediary (Mediator)

2Adaptability or versatility

If every participant requires a direct relationship with the single entity, then trust and accountability are clear, but the network becomes difficult to scale

Engineering Contradiction:

Improvenetwork scalabilityVSAvoidtrust relationship management

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The distributed ledger provides universal trust mechanisms that work across all participants in the network. Through consensus algorithms and cryptographic verification, the system establishes reliable trust relationships without requiring direct bilateral trust between each participant and every other participant, enabling scalable network growth while maintaining reliability

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The distributed ledger creates copies of the liability records across multiple nodes in the network. Each liquidity provider's deposit accounts and transaction records are replicated across the distributed network, providing redundancy and trust verification without requiring centralized single-point-of-failure relationships

Inventive Principle:

Principle #26Copying

3Reliability

If a permissioned distributed ledger is used with multiple entities, then scalability and risk distribution are improved, but system complexity and operational overhead increase

Engineering Contradiction:

Improverisk distributionVSAvoidoperational complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent merges multiple liquidity providers into a unified distributed ledger system where they collectively provide liquidity and share risk. By combining their deposit accounts and transaction processing on a single permissioned ledger, the system achieves risk distribution across multiple entities while maintaining standardized operational procedures that reduce individual operational complexity

Inventive Principle:

Principle #5Merging (Combining)

Data Source

PatentUS12340365B2Distributed ledger based multi-currency clearing and settlement

Publication Date: 2025.06.24 PARTIOR PTE LTD

AI summary

A distributed ledger system may include a first distributed ledger node associated with a first participant bank that maintains a first participant bank deposit account on a blockchain-based distributed ledger in a distributed ledger network; a second distributed ledger node associated with a second participant bank that maintains a second participant bank deposit account on the blockchain-based distributed ledger; and a third distributed ledger node associated with a liquidity provider that maintains a liquidity provider deposit account on the blockchain-based distributed ledger. A consensus algorithm operates on the distributed ledger nodes and updates the blockchain-based distributed ledger in which multiple copies of the blockchain-based distributed ledger across the distributed ledger nodes, and transactions involving the first participant bank deposit account, the second participant bank deposit account, and/or the liquidity provider deposit account are added to a block to the blockchain-based distributed ledger.