Private Messaging

Encrypted communication channels for financial institutions conducting blockchain transactions. Pre-trade negotiation, deal structuring, and counterparty communication contain sensitive information that must remain confidential between parties while supporting regulatory oversight and audit requirements. The solution requires end-to-end encryption with selective disclosure capabilities.

Additional Context

Actors

Banks · Trading Desks · Compliance Officers · Regulators · Auditors

Problems

Problem 1: Pre-Trade Communication Confidentiality

Deal negotiation messages contain sensitive pricing, terms, and counterparty information that must remain confidential between parties while supporting regulatory oversight.

Requirements:

  • Must hide: Message content, negotiation history, counterparty identities (from third parties)
  • Public OK: Existence of communication channel (metadata minimized), message delivery confirmation
  • Regulator access: Selective disclosure for investigations; message retention for compliance; audit trail with access logging

Constraints:

  • Regulatory record-keeping requirements (MiFID II, Dodd-Frank)
  • Integration with existing communication infrastructure
  • Message retention periods (typically 5-7 years)
  • eDiscovery and legal hold capabilities

Problem 2: Post-Trade Documentation Privacy

Settlement instructions, confirmation messages, and reconciliation communications contain sensitive transaction details.

Requirements:

  • Must hide: Specific transaction terms, settlement details, error/exception handling
  • Public OK: Settlement completion status
  • Regulator access: Transaction audit trail, exception monitoring

Constraints:

  • STP (straight-through processing) requirements
  • Integration with settlement systems
  • Multi-party coordination (custodians, clearing, etc.)

Recommended Approaches

Approach TBD. Consider:

  • Integration with existing institutional messaging platforms
  • On-chain anchoring for message integrity with off-chain content
  • Selective disclosure mechanisms for regulatory access

Open Questions

  • What changes from existing systems (e.g., Bloomberg messaging) when moving to blockchain?
  • Is on-chain messaging necessary, or is off-chain with on-chain anchoring sufficient?
  • How do retention and eDiscovery requirements interact with encryption?

Notes And Links