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Distributed ledgers and digital assets

Distributed ledgers and digital assets use shared, replicated records maintained by consensus among participants. They support new forms of payment, asset registration and contracting, with distinct operational and financial risks. Fintech Nexus stewards this page for the Nexus Consortium.

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Distributed ledgers and digital assets on the record.

The Global Centre for Risk and Innovation
  1. 01InstitutionThe Global Centre for Risk and Innovation (GCRI)
  2. 02The methodWhat distributed ledgers and digital assets covers
  3. 03Reference practiceDistributed ledgers are assessed against market infrastructure principles
  4. 04In systemic risk workShared ledgers, shared failure modes
  5. 05Applied inPlatforms that apply this method
  6. 06StewardshipWho maintains this page
  7. 07SourcesWhere this page’s references lead
02The method

What distributed ledgers and digital assets covers.

  1. 01

    Core methods

    consensus protocol analysis; self-executing contract code verification; on-chain analytics; cryptographic key management; token economic modelling; interoperability design.

  2. 02

    Data and instruments

    public ledger records; node and network telemetry; exchange order books; self-executing contract code repositories; audit reports.

  3. 03

    Validation

    Protocols and contracts are checked through formal verification, audits and adversarial testing. On-chain data allow independent reconciliation of balances and flows.

  4. 04

    Limits

    Code defects and governance disputes can cause irreversible losses. Links to the traditional financial system are often opaque.

  5. 05

    Use in risk decisions

    Ledger analysis informs how digital asset failures could spill into payments and markets. It supports evaluation of ledgers for transparent registries and aid distribution.

03Reference practice

Distributed ledgers are assessed against market infrastructure principles.

ReferenceWhat it sets
CPMI-IOSCO PFMIRisk management for systemically important infrastructures
FATF RecommendationsAnti-money laundering for virtual assets
FSB recommendations on crypto-asset activitiesRegulation and supervision
04Process

How the process runs.

Process

Distributed ledgers and digital assets: Payment from instruction to finality

An RTGS system checks a payment, queues it if funds are short, settles it gross in real time and gives final settlement.

  1. 01 Intake

    1. 01Payment instructionSource · ParticipantThe system should use, or at least accommodate, relevant internationally accepted communication procedures and standards.
    2. 04Validity and conditionality checksStep · System operatorA payment is accepted once it passes validity and conditionality checks, such as funds or credit. An invalid payment is generally rejected.

  2. 02 Settlement

    1. 02LiquidityDataset · ParticipantParticipants need liquidity for outgoing payments: central or commercial bank balances, incoming payments and intraday credit.
    2. 05QueueModel · System operatorA valid payment that fails conditionality checks is queued or rejected. Queuing and other liquidity-saving tools can cut liquidity needs.
    3. 06Settle in real time, grossStep · System operatorRTGS settles payments continuously, without deferral, usually one by one. Money settlements should use central bank money where practical.

  3. 03 Finality

    1. 07Final settlementRecord · System operatorThe system gives clear, certain final settlement by the end of the value date at least, intraday or real time where needed.
    2. 08ReconciliationStep · System operatorReconciliation checks that records issued by two different entities match. The pages read state no timing for payment systems.

  4. 04 Resilience

    1. 03Business continuity and secondary siteExercise · System operatorThe plan uses a secondary site and aims to resume critical IT within two hours and settle by end of day. Arrangements are regularly tested.

Outline of an external standard or method, from its public sources. It describes what the framework says, not a record of any run. It does not show that Nexus or any partner performs, certifies or approves a step. A gate is a step of the method, never a Nexus approval. The source is the CPMI-IOSCO Principles for financial market infrastructures. A business continuity plan covers disruption.

05In systemic risk work

Shared ledgers, shared failure modes.

Ledgers replace a central operator with a protocol, which changes rather than removes operational, governance and legal risk. For public uses, the questions are finality, governance of protocol changes, key management and what happens when the ledger and the legal record disagree.

  • Identify who can change the protocol.
  • Assess key management and recovery.
  • Check legal finality of recorded transfers.
06Applied in

Platforms that apply this method.

07Stewardship

Who maintains this page.

Fintech Nexus stewards distributed ledgers and digital assets: it keeps this description current and reviews how the method is applied across the platforms.

08Sources

Where this page’s references lead.

The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.

09Questions

Questions and answers.

Why does one institution host every method page?
GCRI hosts the STEM Commons so that each method has one canonical description. Platforms link to it rather than repeat it, which keeps definitions consistent.
How do I suggest a correction to a method page?
Write to the integrity concern form with the passage and the reason.
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