Wall Street Still Waiting on Blockchain
Wall Street still needs to wait an elusive “couple more years” before it can expect to see distributed ledger-based applications running across financial services firms, according to an audience survey taken during the DTCC’s Fintech Symposium 2017 in Midtown Manhattan.
Emmanuel Aidoo, head of blockchain and distributed ledger strategy at Credit Suisse noted that the remainder of 2017 would be “The Year of Parallel Pilots” and 2018 would be “The Year of Production.”
“There are still issues such as scalability and privacy that need to be addressed,” added Chris Church, chief business development officer for vendor Digital Asset. “You don’t hear that much about privacy today. Maybe that is because people think that it has been fixed.”
Aidoo noted that DLT privacy concerns go far beyond whether a distributed ledger is a public or private ledger.
“You have to have to think micro as well as macro,” he said. “What about Chinese walls? Should my traders see what transactions that are taking place on the blockchain?”
As the industry continues to wrestle with these issues, the DTCC looks to have the some of its DLT-related projects on the cusp of production by year-end.
“In terms of priorities, we are focused on execution,” said Jennifer Peve, executive director, Office of Fintech Strategy at the DTCC.
The industry utility plans to migrate its Trade Information Warehouse onto a DLT-based architecture with the help of IBM, Axomi, and R3CEV, she added.
“The TIW offers the industry today is a way to record, store and process some life-cycle events for some standard contracts,” she said. “The data models that came out when we developed the TIW initially in 2004 and 2005 lend themselves to sitting nicely on a distributed ledger.”
The migration will provide the DTCC with an apple-to-apples benchmark between the new and legacy architectures since, unlike many DLT projects, it is not a greenfield implementation.
The utility also just concluded a proof-of-concept that nets the first leg of US Treasury and Agency repurchase agreements with the cooperation of vendor Digital Asset.
“We are working with an industry group to help validate our priorities and also understand the technology and implementation and how it fits into the DTCC and our clients’ environments,” said Peve.
DTCC officials expect to complete the second phase by June when they will decide whether to develop the project further.
Real-time settlement is the key benefit of blockchain-based processes.
Crypto-focused firms are expected to use their high valuations to buy TradFi firms.
The shared private ledger from Baton Systems enhances settlement speed and efficiency.
Customers can have accelerated treatment of financial transactions, exchange and storage of data.
Project Jura explored cross-border settlement of tokenised assets on a DLT platform.