$72B in Equities to Move to the Axcore Blockchain in an OCC Deal; Will Save Billions
The Options Clearing Corporation (OCC) that’s helping the New York Stock Exchange, the NASDAQ, Cboe and BATS to clear their equity derivatives is in the process of moving its infrastructure to Axoni.
Axoni is a New York-based lending platform that has about $72 billion in loan equities from the Americas. It gives its users real-time access to its data, so it doesn’t send any messages in order to receive information back.
What Would Moving the Stock Lending Process to Axcore Mean?
While the information on Axoni is not visible to all parties, the process of moving the lending to Axcore or any other of the blockchains can save billions in auditing costs, but only if each party has access to the data whenever it needs to. An executive for the OCC said that every profit-generating trader will need only 3 employees to manage any reconciliation process.
The OCC move is scheduled for 2022, after a Proof-of-Concept (PoC) test has been completed. The test includes JP Morgan, Charles Schwab, Blackrock BLK and the Bank of America. Greg Schvey, Axoni’s co-founder, says the transition’s capabilities aren’t comprised by a single project, but by isolated platforms that are running the same technology.
Other Equity-Swap Platforms Powered by Axcore
The Depository Trust and Clearing Corporation has been ever since January 2020 in the final stages of moving $11 trillion of trade information to the Citi and Goldman Sachs equity-swap platforms powered by Axcore,. Here’s what Schvey, who also happens to be Axoni’s CEO, had to say about this:
“What we're talking about here is another major piece of capital markets infrastructure, not just migrating over to blockchain generally, but running on the exact same platform as a number of other major asset classes and infrastructure providers.”
More on the OCC
The OCC has been regulated by both the Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC). It runs a futures and options clearing platform from NASDAQ and had its stock lending platform moving to the Axcore blockchain. This OCC platform has acted as a guarantor when lenders and borrowers were agreeing on security deals, helping the OCC to reduce the risk of borrowers not being able to repay their loans.
At the beginning of 2019, the OCC has started to upgrade its platform with the PoC design in order to show how the auditors’ need to accelerate settlement timings can be reduced on a distributed ledger that’s similar to the Bitcoin (BTC) blockchain.