The Depository Trust & Clearing Corporation (DTCC) has partnered with IBM to develop a “watershed moment” in the use of distributed ledger technology (DLT) for derivatives post-trade processing.
DTCC, which is also partnered with Axoni and the blockchain consortium R3, aims to use IMB’s DLT through to re-platform its Trade Information Warehouse (TIW) to further automate and reduce the cost of derivatives processing by eliminating the need for disjointed, redundant processing capabilities and the associated reconciliation costs.
The TIW service currently automates the record keeping, lifecycle events, and payment management for more than $11 trillion of cleared and bilateral credit derivatives.
The new TIW platform, which begins development in January and is predicted to go live in early 2018, will be built on Axoni’s AxCore distributed ledger protocol and submitted to Hyperledger upon completion.
Hyperledger is an open source collaboration project hosted by the Linux Foundation.
IBM will lead the initiative, provide programme management, DLT expertise, and integration services, and offer the solution-as-a-service, with R3 acting as a solution adviser.
This new project follows the completion of a proof-of-concept for North American single name credit default swaps (CDS) last year by DTCC, Axoni, IHS Markit, and other market participants.
According to DTCC, the proof-of-concept demonstrated that complex post-trade events inherent to CDS can be managed efficiently with distributed ledger technology in a permissioned, distributed, peer-to-peer network.
Chris Childs, CEO of DTCC Deriv/SERV, said: “IBM, Axoni and R3 offer valued DLT expertise as well as a strong commitment to the Hyperledger community and industry standards.”
“We are pleased that they have chosen to leverage their collective expertise and collaborate with us on this initiative, which will allow us to build the best solution for the marketplace while minimising cost to the industry and expediting our speed to market.”
Greg Schvey, CEO of Axoni, added: “Deploying distributed ledger technology in production at this scale is a watershed moment for the industry.”
“The combination of technology and business expertise being contributed to this project from across the participating firms is unparalleled and the benefits are clear. We look forward to working with DTCC and the project partners to bring those benefits to the market.”
.jpg)