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The Depository Trust and Clearing Corporation
(DTCC) has been looking at using blockchain for
specific parts of its post-trade business for some time
now. DTCC announced last year that it was working
to build a DLT solution for its credit derivatives post-
trade processing business based on its existing Trade
Information Warehouse (TIW) capabilities.
The initiative, one of the industry’s largest and most
complex DLT moves to date, had been expected to
tor of solutions business devel-
opment and the office of FinTech
strategy, DLT has the potential to
address the limitations of existing
post-trade processes by stream-
lining and simplifying the siloed
design of the financial industry’s
infrastructure.
“There are several key features
ASX's pathway for the replacement of CHESS
Develop a prototype
platform using DLT
technology Formal gathering of
business requirements
for a replacement
system – to perform all
current core functions
of CHESS, with limited
introduction of new
features initially
January 2016 – July 2016 Commenced August 2016
“It’s unlikely blockchain will completely
decentralise clearing and settlement in the near
future, as there are many political, legal and
structural issues to address.”
MONICA SUMMERVILLE, SENIOR ANALYST, TABB GROUP.
launch in early 2018. However, this has now been put
back to 2019. The delay is related to increased testing
and development of the project—implementation
of nascent technologies cannot be rushed, by all ac-
counts. Yet, despite the time extension, DTCC remains
confident that the implementation of DLT should
boost efficiencies.
According to Jennifer Peve, DTCC managing direc-
34 // TheTrade // Summer 2018
Build out the prototype
to an ‘industrial scale’
platform using DLT
technology
End-2017
that make this technology a poten-
tially attractive option to improve
existing processes, including the
fact that standard rules exist for se-
curities transaction validation and
replication, immutable linkage to
transaction history and auditabili-
ty,” says Peve.
But it is not a panacea. While at
a conceptual level, the function
of netting and clearing could be
carried out using DLT, the cost and
risk considerations of the ledger
model need to be balanced against
the existing efficiencies of current
infrastructure, which for many is