The blockchain technology startup Digital Asset Holdings believes institutional investors have hesitated to enter the digital assets market because existing platforms lack protection and haven't properly considered regulation, according to the company's patent application for its settlement platform that was recently made public.
In April 2015 the firm applied for a patent for a platform that would track and settle digital assets, obligations, and transactions and support links between digital and conventional assets. The U.S. Patent and Trademark Office publishes applications 18 months after their filing.
Digital Asset's solution would also give highly regulated financial institutions and institutional investors the ability to enter digital asset markets while remaining compliant with standards of transparency, risk management and regulation. Network members and regulators could monitor transactions in the digital asset marketplace and react to them in real time, Digital Asset said in the filing.
"Current platforms built to support digital assets on top of bitcoin-like or blockchain-like systems are not structured to provide comprehensive protection to financial institutions" and "may not have contemplated the regulatory regime for financial institutions and financial transactions," the company says in the filing. "As a result, institutional investors have hesitated to enter the digital assets market and have avoided the use of distributed ledgers for their existing businesses."
Last month the bank consortium R3 CEV filed for a patent for a distributed ledger platform designed to manage financial agreements between regulated financial institutions. Goldman Sachs is seeking to patent its own cryptocurrency that would guarantee instant execution and settlement of trades, while Bank of America has filed for at least 20 different blockchain-related patents.