BNY and the National Bank of Canada have officially gone live on EquiLend’s blockchain-powered 1Source platform, marking a significant step forward in automating trade reconciliations across the securities finance industry. The platform, designed to synchronize trade data between counterparties, eliminates the need for manual reconciliation—a long-standing pain point that has cost the industry millions annually.
EquiLend, a leading provider of securities lending services, confirmed that both banks are now executing live transactions using the distributed ledger technology. The system maintains a unified and real-time record of trades, ensuring that both sides of a transaction view identical information simultaneously. EquiLend also indicated that a global broker-dealer will soon begin trading on the network, with several additional institutions preparing to join in the near term.
Transforming an Industry Burdened by Operational Inefficiencies
The securities finance sector currently spends an estimated $100 million per year addressing settlement mismatches and maintaining reconciliation teams. EquiLend’s 1Source platform is intended to remove these inefficiencies by recording transactions on a shared ledger from the outset, aligning all trade details automatically and reducing human intervention.
BNY representatives stated that this deployment reflects the bank’s ongoing efforts to use innovative technologies to reduce operational risks and enhance efficiency for clients. They indicated that leveraging 1Source enables the institution to minimize challenges linked to manual reconciliation while offering improved transparency and service reliability.
Similarly, executives from the National Bank of Canada explained that participation in the platform aligns with the bank’s broader commitment to adopting digital solutions that strengthen client offerings. They emphasized that the initiative lays the groundwork for further adoption of blockchain technologies in securities finance, streamlining workflows, improving resilience, and driving future enhancements across the ecosystem.
Blockchain Technology Behind the Platform
The 1Source platform was developed using Digital Asset’s Canton blockchain framework, a privacy-preserving distributed ledger system that allows multiple parties to share transaction data without compromising confidentiality. The platform initially covers North American equities backed by cash collateral, with planned expansion into corporate bonds, non-cash collateral, and European markets.
Analysts at Vy Solutions had earlier projected that 1Source could save the securities lending industry hundreds of millions of dollars annually by reducing operational costs and minimizing settlement failures. By replacing fragmented back-office systems with a unified digital ledger, the platform mitigates discrepancies that often arise when counterparties maintain separate transaction records.
Under traditional models, mismatches in trade quantities, settlement timelines, or interest rates often emerged days after execution, forcing manual reconciliation and introducing liquidity risk. The blockchain-based approach ensures synchronized updates across both parties, instantly reflecting lifecycle events such as recalls, rate adjustments, or returns.
Network Growth and Future Enhancements
EquiLend’s leadership highlighted that each new participant enhances the overall value of the 1Source network by strengthening its network effect—improving accuracy, transparency, and industry-wide efficiency. The growing participation of major financial institutions is expected to accelerate the adoption of standardized blockchain-based processes for securities finance.
Currently, the platform supports essential functions such as loan initiation, daily mark-to-market valuations, benchmark-based rate adjustments, recalls, and buy-ins. EquiLend plans to expand these features further by introducing automated rerating for large loan portfolios linked to benchmark rate movements, reducing another common source of transaction breaks.
The company also pointed out that the success of 1Source underscores the readiness of financial markets to embrace distributed ledger solutions for back-office processes. As more institutions join the network, the industry could move closer to fully automated trade management—bringing unprecedented transparency and cost efficiency to securities lending operations.
