According to a launch release by Blockstream, the three companies (Crypto Garage) working on SETTLENET aim to improve efficiency and increase financial transaction speeds across the internet. The project will be built within the regulatory sandbox set up by Japan’s lawmakers.

This opens up global customers to several crypto-focused businesses, including over-the-counter (OTC) desks, exchanges, asset managers, and other financial institutional players. The settlement platform will support trading

“between Liquid Bitcoin (L-BTC) and Crypto Garage’s newly-launched JPY token, SETTLENET JPY (JPYS).”

The transactions will run on Liquid Network, a layer two Bitcoin solution, which provides a fast solution to settling payments than the Bitcoin network. According to the post, SETTLENET will also introduce atomic swaps (transactions across two blockchains) in a bid to minimize the overall risk of trades made on OTC desks. It reads:

“[Atomic Swaps] allows businesses on the platform to execute their transactions more efficiently with less paperwork, while also expanding the number of counterparties available for them to work with.”

The service will be available globally, solving the challenges of delays and high costs by employing the fiat-backed JPYS tokens. Once the transaction is completed on the off-chain channel, instead of receiving the amount in fiat currency, the platform settles in JYPS tokens into a Liquid wallet.

The statement further promises the addition of more settlement tokens in the future, including stablecoins such as Tether’s USDT and Liquid’s L-CAD, backed by the Canadian dollar.

The addition of more currencies may give Liquid an edge over the Lighting Network; also, a BTC layer two solutions as LN faces attacks. Blockstream recently extended its watchtowers to Lightning’s network, but questions remain on whether they’ll be enough to prevent further attacks.

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