The Depository Trust & Clearing Corporation (DTCC) has been working on a main blockchain project for quite some time. Finally, they have reached a point that allows them to begin the testing phase, which will include 15 global banks. This is the last step that needs to be taken before the project finally is launched for public use.
The announcement, which was published today, named Barclays as one of the involved banks, though the rest of them were not listed. Lee Braine, the CTO at the Investment Bank Office for Barclays, released a statement on the collaboration, saying,
“We are pleased to be working with DTCC, our partners and colleagues on this exciting project to bring distributed ledger technology to life in a demonstrable way that will enhance efficiencies and lower costs and risks for the industry.”
Overall, they will be testing out the new distributed ledger and cloud-based platform for DTCC. This blockchain is meant to help with the Trade Information Warehouse (TIW), which handles credit derivatives. When the testing is completed successfully, the next step is an “open” testing phase, which is planned for launch this year. When the testing phase is available to the public, market participants and other service provides with have the access to test the ledger. If everything goes according to plan, the testing should be done by the first 2019 quarter. The live launch should not be long after that.
Creating this new platform for TIW is an innovative decision for enterprise blockchain projects, considering how essential it is in the infrastructure of the global financial industry. TIW alone accounts for about 98% of the lifecycle event processing services for credit derivative transactions around the world, which is an $11 trillion market. The customer base alone serves over 70 countries, with 2,500 buy-side firms and other participants.
According to reports, the DTCC is doing everything that they can to stick with the predication of a 2019 go-live date. However, some crypto experts consider their multi-vendor approach to be less than traditional in creating their DLT blockchain. IBM is working on their program management and integration services, while Axoni is creating the DLT and smart-contract functionality with the use of their own blockchain protocol. R3 has jumped in as a solution advisor, though there is something to be admired about DTCC’s method of using the best-performing aspects of all of these platforms.
Other contributors to the infrastructure at this phase include the TradeServ platform, which was created by IHS Markit. They will be helping with the foreign exchange aspect of the service, while establishing credit matching and confirmation, though their options will not be available until the second quarter of 2019.
The TIW is known for their performance and support for any entity involved with credit derivatives trades, payment calculation and settlements, and performing lifecycle events. They track every single aspect of a trade, thanks to Axoni’s smart contract technology.