DTCC Makes Waves with Blockchain Initiative
The Depository Trust & Clearing Corporation (DTCC) is diving headfirst into the technological pool, announcing plans to develop a proof of concept for a Blockchain platform by 2018. This isn’t just a casual dip; it’s more like a cannonball, with DTCC partnering with an array of Blockchain infrastructure providers and savvy developers. The goal? Create a Blockchain-enabled Trade Information Warehouse that could redefine how the financial industry processes trades.
Teamwork Makes the Dream Work
Leading the charge are heavyweight Blockchain startups like IBM, Axoni, and R3, collaborating with DTCC to craft a robust foundation for the future of its global derivatives system. When big players unite, it’s like assembling an Avengers squad of tech innovation!
Details from the Big Cheese
On a crisp January day, DTCC’s president and CEO Michael Bodson shared some insights on the project. Bodson didn’t just toss around buzzwords; he emphasized how Blockchain could streamline operations and dramatically cut costs. In his words:
“The test showed that distributed ledger technology could handle all the various types of events processing needs for credit default swaps at a lower cost point than what our existing infrastructure can manage.”
With claims like these, it’s no wonder everyone’s watching closely!
Dual Projects on the Horizon
Not one to put all its eggs in one Blockchain basket, DTCC is also in cahoots with Blythe Master’s company, Digital Asset, to tackle a different project. While the foundations for the Trade Information Warehouse are being laid, the joint effort with Digital Asset aims to enhance processing for repurchase agreement (repo) transactions. It’s a tale of two Blockchain projects, each with its own charm!
Scaling the Heights of Finance
Although repo markets boast lower transaction volumes compared to the bustling derivatives market, they are not without complexity. Freeman, DTCC’s executive director of industry relations, pointed out that Blockchain technology could act as a semi-manual automation tool, given the repo market’s unique characteristics. His thoughts? Well, here’s a quote for the ages:
“If there were a lot of transactions, it would have been automated a long time ago. It’s a small volume, high-value market. You can handle it semi-manually.”
This isn’t just about efficiency; it’s about embracing new tech in a way that makes sense for the industry.
Interoperability: The Holy Grail of Blockchain
In the world of Blockchain, everyone seems to want to be ‘the one.’ Freeman humorously highlighted the competitive nature of this space, where a motto has emerged: “one chain to rule them all.” Interoperability has become the buzzword du jour, and rightfully so. As different systems emerge, coexistence—and collaboration—will be key!
The Road Ahead
With DTCC’s earnest commitment to Blockchain testing and implementation, it’s clear we’re on the cusp of transformation in trade information processing. Whether the skeptics will convert into enthusiastic supporters is yet to be seen, but there’s no doubt that DTCC is taking steps to ensure its place in this burgeoning tech landscape.
