Privacy-preserving analytics for the securitization market: a zero-knowledge distributed ledger technology application
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40854_2020_Article_172.pdf
Size
2.01 MB
Format
Adobe PDF
Checksum (MD5)
bc34ba2f4f0514391b121030257f9b11
Author(s)
Meralli, Sophie
Date Issued
January 25, 2020
Publisher
Springer Berlin Heidelberg
Citation
Financial Innovation. 2020 Jan 25;6(1):7
Version
Final published version
Abstract
Abstract
A zero-knowledge proof or protocol is a cryptographic technique for verifying private data without revealing it in its clear form. In this paper, we evaluate the potential for zero-knowledge distributed ledger technology to alleviate asymmetry of information in the asset-backed securitization market. To frame this inquiry, we conducted market data analyses, a review of prior literature, stakeholder interviews with investors, originators and security issuers and collaboration with blockchain engineers and researchers. We introduce a new system which could enable all market participants in the securitization lifecycle (e.g. investors, rating agencies, regulators and security issuers) to interact on a unique decentralized platform while maintaining the privacy of loan-level data, therefore providing the industry with timely analytics and performance data. Our platform is powered by zkLedger (Narula et al. 2018), a zero-knowledge protocol developed by the MIT Media Lab and the first system that enables participants of a distributed ledger to run publicly verifiable analytics on masked data.
MIT Department
Massachusetts Institute of Technology. Media Laboratory
Terms of Use
Creative Commons Attribution
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1186/s40854-020-0172-y
