Nabatech, a Swiss digital asset specialist, has selected Polkadot’s Substrate blockchain to build its digital asset platform for central banks and financial institutions.
The decision to go with Polkadot’s Substrate framework was made after a thorough analysis of seven potential platforms.
Nabatech Taps Substrate
Nabatach is a joint venture between SICPA, a cash cycle expert for several of the world’s central banks and sovereign states, and INX, a real-world asset tokenization platform regulated in the US by the Securities and Exchange Commission (SEC) and FINRA. Its goal is to support central banks in tokenizing assets such as central bank digital currencies (CBDCs), digital bonds, and stablecoins.
Before selecting Polkadot’s Substrate, Nabatech evaluated several blockchains for its regulated digital asset platform, including Ethereum Hyperledger Fabric, Cosmos, and Polygon. The blockchains were assessed on several criteria, such as Sybil resistance, coding language, runtime, security, governance, interoperability, and business process integration. After assessing all the blockchains, Substrate emerged as the top choice for Nabatech. Speaking about the selection process, Nabatech CTO Paz Diamant stated,
“After conducting a deep technical analysis of blockchains with multiple economy and technology experts, we were attracted to Substrate’s flexible and modular design. Its framework can be quickly adjusted to suit any business or technical requirement, flexibly, without compromising on security or scalability.”
The system is already being used as a sandbox for central banks to provide infrastructure solutions. It can also help boost currency supply, lifecycle, transfer and settlements, and sovereign compliance optimization.
The Benefits Of Substrate
Central banks and other premier financial institutions require a high level of security and stability. Substrate-based networks are able to benefit from strong cryptography and a host of other features that can defend against common attack vectors. Standout features of Substrate include support for retail and wholesale transactions that involve CBDCs. Substrate also expands the utilization of a modular structure that allows central banks to select the solution foundation best suited for their monetary policy and financial strategy.
Substrate’s flexibility also allows central banks to start with wholesale and end with retail CBDCs, depending on their preferences.
Central Banks Pushing For CBDCs
Several central banks around the world are mulling the development of central bank digital currencies. The Republic of Rwanda recently revealed plans to create its own CBDC within two years. Rwanda’s CBDC aims to improve its financial system and offer citizens a safe and convenient alternative to physical cash. The country also hopes to bring more people into the financial system through CBDCs.
Ripple CEO Brad Garlinghouse has also announced partnerships with nearly ten governments to help develop their CBDCs. The partnership will allow the governments to use Ripple’s blockchain technology to update their financial systems.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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