Title: Private Messaging · EthSystems

URL Source: https://original.es-internal.pages.dev/use-cases/private-messaging/

Markdown Content:
---
description: 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.
title: Private Messaging · EthSystems
image: https://original.es-internal.pages.dev/og.png
---

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## 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

* Related: Pre-trade negotiation in [Private Bonds](/use-cases/private-bonds/), [Private FX](/use-cases/private-fx/), [Private Smart Derivatives](/use-cases/private-derivatives/)
* Related: [Private Identity](/use-cases/private-identity/) (identity for message authentication)

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