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The Whiteboard

Responsible Development of Digital Assets Using VMware Blockchain

Last month, the White House issued an Executive Order regarding digital assets, acknowledging that “advances in digital and distributed ledger technology for financial services have led to dramatic growth in markets for digital assets” and emphasizing the need for responsible development, safeguards, and risk mitigation.

At VMware, we could not agree more. We are pleased to see the government leaning in to lead in this space. It is exactly why we built VMware Blockchain as an enterprise-grade, distributed ledger platform that meets the needs of institutions developing and implementing digital assets and multi-party dApps (decentralized applications). VMware Blockchain provides a Scalable Byzantine Fault Tolerant (SBFT) consensus protocol, advanced privacy capabilities, high transaction speeds, production-ready/day-two operations, and support for Daml and Ethereum (EVM in technical preview), complete with VMware’s world-class customer support.

There is no question that digital assets are the future of value exchange or that digital currencies are the future of money. Traditional currencies have become limiting in our always-on digital world. But for digital currencies to replace them, they will need to be trusted (issued by authorities and highly regulated entities, such as banks) and provide privacy (allowing for anonymous transactions, while still being auditable, when necessary — such as when the amounts are high), without compromising security.

VMware Blockchain has helped large capital-market institutions, such as Broadridge Financial and the Australian Stock Exchange, operate responsibly in highly scalable and regulated environments. The Broadridge digital ledger repo (DLR) platform has already executed $35B in average daily volumes — a figure that grows daily. UBS (a multinational investment bank and financial services company founded and based in Switzerland) joined the platform in August of 2021, with UBS’ Paul Chiappetta, Americas’ COO of Group Treasury, praising the technology’s ability to reduce risk and improve efficiency.

In addition to capital-market use cases, we are interested in the development of central bank digital currencies (CBDCs), which are distinguishable from cryptocurrencies (such as Bitcoin or Ethereum) in that they are the direct liability of a central bank or an entity like the Federal Reserve. VMware understands that providing granular privacy controls for digital currencies is key to driving adoption. We believe that many of the strong privacy properties found in physical cash can be accomplished with a digital analog.

VMware Research is developing a technology called UnTraceable Transactions (UTT) — the first system for decentralized electronic cash with accountable privacy. UTT provides a unique approach to the privacy protections mentioned in the White House’s Executive Order, and they can be applied to CBDCs and stablecoins. In fact, we are currently working with a large world economy’s central bank to put VMware’s UTT approach to the test for their future CBDC.

We continue to learn and further develop our blockchain product and are excited about the role we can play in the future of digital assets. If you’d like more information, feel free to email our Blockchain team.

Best,

Kit

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