DTCC: Blockchain Enabled Derivatives Platform to Undergo Testing Phase

Headquartered in New York, The Depository Trust & Clearing Corporation (DTCC) had taken a significant step forward in its attempt to integrate the blockchain technology into its operations, as it brought aboard 15 leading global banks for the testing phase of its credit derivatives platform, per a report by Finextra, dated November 6, 2018.

Barclays Among the Banks Onboarded

Going ahead with its Trade Information Warehouse service for the settlement of credit derivatives, the distributed ledger technology (DLT) and cloud will help automate the record keeping, payment management, and lifecycle events for bilateral and cleared credit derivatives worth more than $11 trillion – approximately 98 percent of all credit derivative transactions worldwide.

While not all the participating banks have been named yet, one of the premier banks which has been brought aboard is Barclays. The other 14 banks are still undisclosed.

It’s worth highlighting that DTCC had decided to rebuild its credit derivatives clearing platform on the blockchain technology during early 2017.

It was further learned that the 15 banks would participate in end-to-end user acceptance tests. After testing, the results will be validated depending on the interaction between firms, systems, and other relevant market infrastructure providers, which include MarkitServ and its recently unveiled credit platform, TradeServ.

Upon successful completion of testing, DTCC will invite other market players to participate in open testing. The testing is expected to be completed by Q1 2019, post which the system is supposed to go live.

Sharing his excitement regarding the announcement, Chris Childs, CEO, DTCC DerivServ, said:

“The transformation of DTCC’s Trade Information Warehouse using distributed ledger and cloud technology, along with the modernization of MarkitServ’s confirmation system, is truly a ground-breaking effort pushing the boundaries of technology use in the industry.”

DTCC Bets Big on the DLT

While developments move forward steadily in the world of blockchain technology, DTCC seems to be going all in on the disruptive force. BTCManager reported on October 18, 2018, a study conducted by DTCC which concluded that the DLT could scale to a large 100 million equity trades per day.

The research was commissioned to Accenture for technical expertise and developing a prototype of the U.S. equity clearance and settlement system.