Depository Trust & Clearing Corp, 15 Banks Trial DLT for Credit Derivatives
Worldwide post-trade market framework giant The Depository Trust & Clearing Organization (DTCC) is entering the trial stage of its restructured Trade Information Stockroom (TIW) based on distributed ledger technology (DLT). DTCC’s distribution center gives event processing services for around 98% of all credit derivatives transactions in the worldwide marketplace.
The framework provider is presently allegedly working with fifteen of the world’s leading banks to test its modern DLT-based rebuilding of the distribution center. Whereas member banks in DTCC ’s 2016 proof-of-concept (PoC) included Bank of America, Citi, Credit Suisse, and JPMorgan, today’s announcement only unequivocally names UK – based Barclays alongside 14 anonymous others.
Per the press release, the testing will involve utilizing mimicked use cases and trial of the communications between frameworks, firms, and software from other major framework providers such as MarkitSERV, in specific the latter’s modern credit software “TradeServ.”
Lee Braine, at Barclays Chief Technology Office, has opined the efforts by DTCC and its partners will turn “distributed ledger technology to life in a demonstrable way that will enhance efficiencies and lower costs and risks for the industry.”
The announcement provides an insight into the roles and technology of the project partners, explaining that a consortium of IBM, Axoni and R3 have “recoded the warehouse’s functionality” using DLT and cloud services over an interval of 18 months.
IBM is supposedly leading the project, offering “program management, DLT expertise, and integration services”; enterprise-centered blockchain firm Axoni is offering DLT framework and smart contract applications developed on its AxCore blockchain protocol; and blockchain consortium R3 has taken the role of a “solution advisor.”
DTCC’s release also demonstrates the massive extent of the framework provider’s footprint in the worldwide financial business: as of 2017, DTCC’s subsidiaries “processed securities transactions valued at more than U.S. $1.61 quadrillion,” and that its depository gives custodian and asset servicing arrangements from “131 countries and territories valued at U.S. $57.4 trillion.”
It also states that the Global Trade Repository Service of DTCC maintains approximately 40 million over-the-counter (OTC) positions weekly and processes more than 1 billion communications monthly through its licensed trading repository group. As reported in October, a recent DTCC study found that Distributed Ledger Technology (DLT) is sufficiently scalable to support the daily volume of trading in the USA equity market.
The 19-week research, conducted in collaboration with Accenture and R3, supposedly demonstrated that DLT is capable of handling an entire trading day’s volume at peak rates, which can attain as extreme as 115,000,000 daily trades, or 6,300 trades per second for five uninterrupted hours.