Icap hails blockchain proof-of-concept as post-trade breakthrough

Icap hails blockchain proof-of-concept as post-trade breakthrough

Icap has completed a proof-of-concept test on the use of distributed ledger-based smart contracts on Traiana's Harmony network, declaring that the technology has the potential to "significantly transform post trade operations".

The test, conducted by the inter-dealer broker's Post Trade Risk and Information (PTRI) division used blockchain infrastructure provided by Axoni, a New York-based technology firm and beneficiary of Icap's Euclid early-stage startup fund, to create a private, peer-to-peer, distributed ledger network.

Tested using bilaterally executed spot/forward foreign exchange block trades, the PTRI division imported matched messages from Harmony and converted them in real time to blockchain-based smart contracts. The smart contracts were then distributed to nine representative participant nodes on the blockchain network, where trades were permissioned for additional services such as valuation, compression and reporting.

Icap says the implementation demonstrated the potential to provide a common golden source of user transaction and reference data cross asset, reduce operational risk and realise multiple back office and technology cost savings.

The broker says the test represents "a major step forward' in the practical use of blockchain technology by focusing on data distribution in a way that does not challenge the fundamental role of participants and operates merely as an overlay with existing architecture.

Jenny Knott, CEO of Icap’s PTRS division says the business will now move to discuss with participants how they can access the new golden data source and start work to realise technology savings in disparate systems.

“In successfully completing a proof of technology test, Icap has demonstrated one of the first real world applications of distributed ledger technology that has the ability to significantly transform the post trade landscape,£ he says. "Realising the value of Icap’s unique portfolio of PTRI businesses and investee companies, we have combined our expertise, networks and technology with Axoni’s distributed ledger technology to push the boundaries of post trade innovation.”

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