The Depository Trust & Clearing Corporation has recently issued a white paper devoted to blockchain. The distributed ledger technology was called a possible solution for financial markets.
In the paper DTCC urges to create a common distributed ledger platform that could unify the system of financial services. The existing system is quite efficient, says the paper, but it consists of many siloed elements because it has been created throughout the last decades in a gradual, decentralised manner. This increases complications that might be avoided if a better system with uniform rules were implemented.
A ledger based on the blockchain technology may well be the looked-for solution, claims DTCC, and today we have a “once-in-a-generation opportunity” to reimagine the system. But this should be done by a joint effort of all the major participants of the global financial market, including governments that should create a legal regulatory framework for the new structure. A wide discussion and research should be launched to figure out how to seamlessly substitute the existing and working system for a better one, if necessary. The company supposes that it is in the best position to start this discussion, being a long-term important player in post-trade processing.
“The current approach of many firms experimenting in private with a technology that uses consensus protocols to provide transparency could lead to a new post-trade environment with the same integration and reconciliation problems that companies face today,” said Michael Bodson, President and CEO at DTCC, in a press release. “DTCC is uniquely positioned to help lead the effort in exploring how distributed ledger technology can simplify or replace legacy post-trade systems.”
This is not the first time the company shows its interest in blockchain. Michael Bodson recently joined the board of directors in Digital Asset Holdings, a distributed ledger technology developer, after a financial investment DTCC made into the company. Besides, CoinFox has already written that in the end of 2015 DTCC joined the Linux Foundation with the Hyperledger project aimed at developing the blockchain technology.
DTCC is the leading expert in post-trade processing with data centres and offices in 16 countries, providing services for businesses from over 130 countries. The company openly states in its recent paper that for more than 40 years of market activity it has built a centralised, guarded, trusted model of securities processing – something quite opposite to the ideology of blockchain. Still, now it is exploring the alternative to its conventional method.
Andrew Levich
