Vanguard is Making Use of Blockchain Technology To Manage its $1.3 Trillion Dollar Index Funds

  • Since early 2018, a number of established financial institutions have been trying to implement blockchain-based governance platforms (into native operational frameworks) in order to streamline their internal tx’s.
  • Vanguard’s latest attempt to incorporate blockchain technology into its existing administrative structure is being viewed by many as being a way for the investment giant to gain additional investor trust.

According to a report released earlier today by Forbes, investment firm Vanguard has been making use of a blockchain-based ledger system since February of this year to manage its various financial offerings (like its largest mutual fund, the $800 billion Total Stock Market Index Fund – TSMIF)

To elaborate further on the matter, we can see that Vanguard’s latest blockchain ecosystem is now fully functional and is currently being used by the company to look after nearly $1.3 trillion worth of its funds.

  • The firm helping Vanguard with its blockchain operations is Symbiont — a NY based startup that first came to prominence around 5 years ago.
  • In the future, Vanguard is looking to create additional products that will be used for things like tracking the full life cycle of mortgage security and settling securities trades.
  • Prior to its partnership with Symbiont, Vanguard made use of different manual processes to account for its CRSP-based indexes.

Talking about his firm’s latest blockchain platform and how it has helped redefine the way in which the company conducts its day to day business, Vanguard’s Warren Pennington was recently quoted as saying:

“We now have a synchronized database that is constantly updated every time CRSP makes a change to the index. No more manual updates or manual pulling of data. No more manual reconciliations.”

As things stand, it appears as though Vanguard, Symbiont and CRSP are the only three firms that have direct access to a blockchain based indexing system. However, over the past year or so, there have been a number of other big-name players that have also tried to run test versions of similar software offerings.

Final Take

In closing out this piece, we need to make it absolutely clear that Symbiont’s latest software has

“fully replaced Vanguard’s old system of manual data updates.”

It now remains to be seen if other companies follow suit and start to explore blockchain technology much in the same way as Vanguard has done up until now.

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