The Depository Trust & Clearing Corporation has announced that its DLT-based Project Ion initiative is now live in a parallel production environment.
The distributed-ledger technology (DLT) driven settlement service is now processing an average of more than 100,000 bilateral equity trades daily and more than 160,000 transactions on peak days in parallel production, with the existing settlement systems of the Depository Trust Company, DTCC’s US depository service, providing the authoritative record of legal ownership.
DTCC indicates that the rationale for Project Ion is to provide a resilient, secure and scalable settlement alternative to its users based on DLT. This will also align with the SEC’s plans to move the US market to an accelerated T+1 settlement cycle, with Project Ion built to support netted T+0 settlement as well as T+1 and longer cycles.
The project was built in collaboration with DLT specialist R3 using R3 Corda blockchain technology.
With the production environment live, DTCC is working with its users on a phased expansion of the settlement platform. This may include extending the range of DTC activities that it supports, as well as central clearing activities provided through National Securities Clearing Corporation (NSCC), the DTCC clearing subsidiary, on this DLT platform.
Murray Potzmanter, DTCC managing director and president of DTCC clearing agency services and head of global business operations, says: “This is a milestone achievement for the equity markets and reflects the deep level of collaboration and partnership between DTCC and our clients. Project Ion is an important step forward in advancing digitalisation in financial markets and opens the door to exciting new opportunities to drive greater efficiencies, risk management and cost savings for the industry.
“Digitised assets and emerging technology such as DLT are shaping and evolving the financial services landscape and we remain committed to advancing innovative solutions that capitalise on opportunities, deliver new value and drive the industry forward.”
DTCC general manager of Equity Clearing and DTC Settlement Service Michele Hillery adds: “Project Ion provides a parallel book and infrastructure for limited bilateral transactions with DTC’s existing systems remaining the authoritative source of transactions. With firms across the industry at different levels of maturity around DLT adoption, DTC is building this platform to provide optionality and flexibility to clients.”
“Those who are ready to leverage the Project Ion platform can begin development efforts today while others can continue to use our classic solutions,” says Hillery.
R3's chief executive David E. Rutter, comments: “This is a watershed moment for enterprise blockchain technology in capital markets. Project Ion will transform the financial services industry globally for years to come, providing a framework for how this cutting-edge technology can be applied to strengthen and modernise a market to the benefit of all participants.”
