The Depository Trust & Clearing Corporation (DTCC), the central bookkeeper for Wall Street’s securities trades, has entered the test phase for its credit derivatives blockchain solution, the Trade Information Warehouse (TIW).
First announced in January 2017, the TIW enables DTCC and its clients to further streamline, automate and reduce the cost of derivatives processing across the industry by eliminating the need for disjointed, redundant processing capabilities and the associated reconciliation costs.
The solution has been developed in partnership with IBM, Axoni, and R3. IBM provided program management, blockchain expertise, and integration services. Axoni provided the distributed ledger infrastructure and smart contract applications built on the AxCore blockchain protocol, with R3 acting as a solution advisor.
In the testing phase, which is expected to be completed by the first quarter of 2019, Barclays and 14 unnamed banks will be conducting end-to-end, structured user acceptance tests. The tests will leverage simulated use cases and test data and validate the interaction between systems, firms and other key market infrastructure providers, including MarkitSERV and its new platform for credit, TradeServ.
“The transformation of DTCC’s Trade Information Warehouse using distributed ledger and cloud technology, along with the modernization of MarkitSERV’s confirmation system, is truly a ground-breaking effort pushing the boundaries of technology use in the industry,” said Chris Childs, CEO of DTCC DerivSERV. “We are proud to be collaborating with a number of the world’s leading banks, MarkitSERV and all our partners on this exciting initiative to revolutionize the derivative industry’s credit market infrastructure. We look forward to launching the service next year.”
If the initial trial proves successful, DTCC expects to move to an “open” testing phase by the end of the year, when other market participants and service providers will have the opportunity to test.
“We are pleased to be working with DTCC, our partners and colleagues on this exciting project to bring distributed ledger technology to life in a demonstrable way that will enhance efficiencies and lower costs and risks for the industry,” said Lee Braine from the Chief Technology Office at Barclays.
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