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DTCC’s cloud-based platform will join hands with several other organization to implement its blockchain-based credit derivatives services.
The blockchain project for the Depository Trust & Clearing Corporation (DTCC) has now entered its testing phase along with 15 other global banks. This testing phase is said to be the last testing step before taking the blockchain live. As announced in Consensus 2018, DTCC’s distributed ledger will go live in early 2019.
However, the U.K.-based banking giant Barclays is the latest to join the consortium of global banks participating in the test. Barclays and the other 14 unnamed banks will kickstart DTCC’s blockchain network and cloud-based platform for its credit derivatives Trade Information Warehouse (TIW).
Before the end of this year, DTCC is likely to move it to an “open” testing phase wherein other service providers and market participants will get an opportunity to test. Lee Braine from the Investment Bank CTO Office at Barclays said:
“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”.
Creating a blockchain-based derivatives platform for TIW is one of the most critical blockchain projects for enterprise solutions. TIW currently caters to 98% of credit derivative transactions worldwide worth around $11 trillion and provides them lifecycle event processing services. TIW’s major customer base includes global market participants from around 70 countries and other global derivative dealers.
To cater to such a huge customer base, the DTCC has taken a multi-vendor approach in providing DLT services. Axoni will develop the entire DLT infrastructure and smart contracts functionality using its native AxCore blockchain protocol. IBM will provide the management and integration services while R3 will act as a solution advisor.
Other big financial infrastructure providers like IHS Markit’s new TradeServ platform have also joined DTCC during the recent testing phase. These giants will look after services like a re-architectured credit matching and confirmations as well as deliver foreign exchange options. All these services are likely to go live in the second quarter of the next year.
The TIW acts as a one-stop record keeper for all the parties which are involved in performing lifecycle events, payment calculations and settlements, derivative trades, etc. The TIW tracks the entire process right from the initiation of the trade to its maturity. This includes processes like modifications, amendments, rate resets, corporate actions, and termination. All these processes will now be automated using Axoni’s smart contract technology.