Global Custodian Clearing and Settlement Issue 2018 | Page 5

[ T H E
F I R S T
L O O K ]
Canadian group herald
instantaneous blockchain
settlement success
Payments Canada, the Bank of Canada and TMX Group conclude that instantaneous
equity settlement through distributed ledger technology is “feasible”
A
Canadian-led consortium has
successfully demonstrated the
instantaneous clearing and set-
tlement of securities using distributed
ledger technology (DLT).
Payments Canada, the Bank of Canada,
TMX Group, Accenture and R3 make
up the group which has concluded that
instantaneous equity settlement through
distributed ledger technology is “feasible”
in what could be a landmark moment for
the securities services industry.
According to the group the proof of
concept is the first to integrate cash and
assets to enable settlement on a distrib-
uted ledger, the same technology that
underpins cryptocurrencies.
The result of the proof of concept was
an instant, end-to-end equity settlement.
“We have witnessed an impressive
achievement and an important finan-
cial technology milestone for Canadian
capital markets with the successful
transaction of tokenised securities and
cash in their basic forms,” said John Lee,
managing director, enterprise innovation
& product development, TMX Group.
“Many complex challenges remain as we
move ahead, but we look forward to the
crucial collaborative work necessary to
effect substantive, transformative change
in global markets.”
The initiative named Project Jasper was
set up to experiment with an integrated
securities and payment settlement plat-
form based on DLT.
Previous phases of the project fo-
cused on the clearing and settlement
of high-value interbank cash payments
using DLT; however, Jasper III – which
explores an integrated payments and
securities infrastructure – was delivered
by Accenture, leveraging R3’s Corda DLT
platform.
The group said “the proof of concept
allowed clearing and ‘delivery versus pay-
ment’ settlement immediately, demon-
strating that it’s possible to complete
post-trade settlement on a DLT platform.”
Global Custodian’s final magazine
of 2017 carried the front cover title of
‘Blockchain gets real’ a nod to the pro-
gress being made in the securities services
industry with the technology. At the time,
we pointed out initiatives in many low-
risk processes such as corporate actions
and proxy voting where many custodians
had examples of successful testing.
In 2018 however, we have seen a contin-
uation of major breakthroughs includ-
ing the Australian Securities Exchange
(ASX) announcing plans to go live with
a new equity post-trade system based on
blockchain technology by the first quarter
of 2021.
Elsewhere, Northern Trust went live
with a blockchain solution allowing firms
to carry out audits of private equity life-
cycle events, as it continues to expand its
technological capabilities for alternative
fund managers.
While the Canadian Securities Ex-
change (CSE) developed a securities
clearing and settlement platform using
blockchain technology.
The latest move from the Canadian con-
sortium in addition to CSE’s development
has placed the country at the top of the
leaderboard when it comes to innovation
in financial services.
“Project Jasper positions Canada as a
leading innovator, the first to fuse assets
and fiat currency on ledger, which is
fundamental to moving towards produc-
tion,” said John Velissarios, Accenture’s
blockchain technology & security lead.
“Canada is the first developed market to
focus on a full-cycle, on-ledger, trade-set-
tlement system — laying the groundwork
for the Canadian financial market infra-
structure to collaborate with similarly
positioned global partners to derive new,
mutually beneficial opportunities and
benefits of DLT.
Summer 2018
globalcustodian.com
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