The Depository Trust and Clearing Corporation has just signed in 15 global banks as it takes its blockchain project over to testing phase. This is the last stage before the project will go live. The announcement was made yesterday and while all the banks were not named, Barclays, the UK based bank is said to be one of the banks that will participate in the test. The banks will work with DTCC to kick the tires of its cloud-based platform and distributed ledger for its Trade Information Warehouse (TIW).
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After the project is complete, the company is going to proceed to an open testing phase which is scheduled to take place at the end of the year. When the time comes, other interested parties will be able to participate in the test. All testing will be complete before March next month after which the system will go live.
Currently, this project that involves building a platform for TIW is considered as one of the most ambitious blockchain enterprise projects in the world. This is because the current system is key in the global financial industry. TIW offers lifecycle processing services for about 98% of the global credit derivative transactions which is worth about $11 trillion. It’s customer base includes big time dealers in derivatives and over 2,500 buy-side firms spread through 70 countries.
The company is sticking to 2019 as its launch year. This date was announced in Consensus 2018 which took place in May. The CTO from Barclays said:
“We are happy to work with DTCC, our colleagues and our partners on this project that is aimed at bringing blockchain technology to life in a way that will boost efficiency and reduce risks and cost for the industry as a whole”.
Inviting New Actors
DTCC has never been known to take a multi-vendor approach with its projects. This time, however, the case is different. The company has already partnered with IBM. IBM will provide integration and program management services. Axoni will build the smart contract and DLT functionality on AxCore’s blockchain protocol. R3 wykk act as a solution advisor.
Other key financial infrastructure providers will be involved in the testing phase. Establishments like IHS Markit’s TradeServ that is aimed at delivering foreign exchange options will be involved in the testing. This platform also delivers re-architectured credit confirmations and matching, that are all scheduled to go live next year.
TIW has set a record for all the parties that are involved in trading credit derivatives, payment calculations, performing lifecycle events, etc. It keeps track of everything from the initiation stage of the trade to maturity. It also keeps track of amendments, terminations, rate resets, and any other corporate actions. The entire process will be automated with Axoni’s smart contract. Also, TIW includes derivative positions from LCH SA’s CDSClear, and ICE.