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So models are trusted but algorithms are not? Just asking, I really don't know. In the case of debanking it seems that those who were debanked didn't consider

by rapjr9 2y ago

So models are trusted but algorithms are not? Just asking, I really don't know. In the case of debanking it seems that those who were debanked didn't consider their own counterparty risk, this is a two-way street. Businesses using multiple banks seems to be newly popular. Perhaps loans need to be considered separately from bank accounts? I'm also suggesting creating a new kind of payment system for the US federal government, so in that there is a large risk for the people that try to misuse it. Perhaps a payment system is more amenable to automation than a bank account?

tadfisher 2y ago
How do you encode in a smart contract that the counterparty is not a fraudster and is not funneling money for fraudsters? That is the core risk that banks are exposed to, because they are the ones who are on the hook for stolen funds. Secondary risks are those enforced by regulators: KYC, AML, BSA. The government does not want your bank handling money for sanctioned individuals, countries, or terrorists. How do you encode in a smart contract that the counterparty does not represent one of these categories?