London Stock Exchange, CME Group and Banks Establish Blockchain Settlement Group

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by Polina Chernykh · 2 min read
London Stock Exchange, CME Group and Banks Establish Blockchain Settlement Group
Photo: Tatenda Nyamande/Flickr

Some of the leading companies in the financial industry, including Societe Generale and the London Stock Exchange, have partnered to study the potential use cases of the blockchain technology.

A group of financial companies have partnered to establish a body that will investigate the potential applications of the blockchain in the payments industry. According to the Financial News, the organization is projected to explore how the technology may transform the way of conducting transactions.

Called ‘Post Trade Distributed Ledger Working Group’, the team unites banks, trading service providers and exchanges, including the London Stock Exchange, Euroclear, CME group, Societe Generale, Swiss bank UBS and clearing house LCH.Clearnet.

The group will investigate how the technology behind bitcoin can improve and accelerate securities trading. It is aimed at simplifying the process by avoiding challenging systems utilized in the finance industry. With the use of the blockchain, clearing and trading of stocks can take just a couple of minutes, while the traditional methods usually take about two days.

“Our view is the technology needs to be developed in a considered and rigorous manner, in partnership with clients, to provide the right service and benefit to them. Given our long experience in post-trade, our group has significant technical expertise to bring to the discussion,” a spokesperson from the London Stock Exchange said.

“We believe that driving innovation and developing new products using this exciting new technology will significantly reduce risk and margin requirements while delivering the opportunity for deeper regulatory oversight.”

There group has already conducted three meetings, with the first one having been hosted by the London Stock Exchange.

Earlier, UBS and Societe Generale have announced that they joined a consortium of 25 banks led by the financial innovation firm R3 to collaborate on the development and application of the distributed ledger technologies in the financial services industry.

The idea behind the project is to develop protocols and standards that will help to take the technology to the mainstream.

Since the project’s launch in September, it has already attracted some major international banks, including Morgan Stanley, Bank of America, HSBC, Commonwealth Bank of Australia, Deutsche Bank, J.P. Morgan, Goldman Sachs, Royal Bank of Canada and Royal Bank of Scotland.

Nowadays, more banks and financial institutions start to explore the blockchain and its potential use cases. The number of investors pouring their money into the blockchain startups is now rapidly growing as well. The technology presents some key benefits, including higher level of transparency and faster transactions, that can help companies to cut costs and avoid dealing with third parties.

Blockchain News, News
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