Depository Trust and Clearing Corporation (DTCC) has achieved a significant milestone in the use of digital ledger technology (DLT). The financial infrastructure provider has completed tests on an early version of a blockchain system. The new system has the potential to support $11 trillion USD worth of credit derivatives a day.
DTCC Blockchain System
The ambitious blockchain platform is poised to go live in the first quarter of next year. The use of distributed ledger technology will allow the processing of 100 million trades per day. The fact that the technology can enable transactions at a very high rate compared to public blockchains is a major breakthrough.
DTCC is currently working to align the reporting database with regulatory requirements.
“We are excited to lead this important work to advance the performance capabilities of DLT. As an early adopter of DLT, we are encouraged by the results of the study. Because they prove that the technology’s performance can scale to meet the needs of markets,” said Murray Pomander, Head of Clearing Agency Services, and DTCC.
The use of blockchain technology to facilitate trades in the equity market is a major development. The tests carried out so far show that digital ledger technology is scalable enough. While DTCC’s new DLT system can handle huge trading volumes at peak levels, it is still not there. For starters, DTCC confirms they are yet to determine if DLT can meet the necessary security and operational needs.
DTCC Blockchain Partnership
The service provider embarked on the project of leveraging blockchain technology on its offerings early in the year. At the start, the goal was to come up with an infrastructure that would underpin Centralized Trade Information Warehouse for counter derivatives. The firm also sought to come up with a system that would reduce the time it takes for derivatives to clear.
A partnership with tech giant IBM, blockchain startup Axon, and blockchain consortium R3 has since borne fruit. The trio is now preparing to test the blockchain ahead of potential migration of TIW data in a way that meets regulation.
Solidity smart contract language powers all applications running on DTCC’s new blockchain system for derivatives. Integration of AxCore Protocol should allow the configuration of the system to meet the specific needs of the DTCC system. Unlike other similar Ethereum-based systems, DTCC’s new blockchain implementation does not come with a native token.
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