Project Stella is a joint research effort by the Bank of Japan (BOJ) and the European Central Bank (ECB) on distributed ledger technology (DLT) for financial market infrastructures.

On March 27, 2018, the BOJ and ECB shared findings from Project Stella's second phase, which studied "how the settlement of two linked obligations, such as the delivery of securities against the payment of cash, could be conceptually designed and operated in an environment based on DLT."

In slightly simpler terms, when two people execute a trade, how can we make sure that the first person definitely receives their stock and the second person definitely receives their cash? This is a game theory question, and the banks thought that a delivery versus payment (DvP) system based on DLT could provide a solution.

Linking asset transfers so that the transfer of one asset occurs if and only if the transfer of the other asset occurs is a condition referred to in computer science by the term "atomicity" (hence the more familiar phrase "atomic swaps"). The banks explained, "The outcome of settlement is either both parties successfully exchanging those assets, or no transfer taking place."

For Project Stella, prototypes for DvP on DLT were developed using Corda, Elements, and Hyperledger Fabric.

News Recsouce: Ethnews.com