26 September 2017
visit www.avoka.com

Major banks perform successful test of smart contracts in CDS market

07 April 2016  |  9821 views  |  0 chequered flag

Four major banks, the DTCC and Markit have announced the completion of a successful test of the use of distributed ledger technology and smart contracts to manage post-trade processes in the credit default swaps market.

Over the course of the multi-month project, the banks - Bank of America Merrill Lynch, Citi, Credit Suisse, JPMorgan - acting in concert with the DTCC and Markit established a blockchain trade processing network across a blend of hosted and locally-installed deployments of software from distributed ledger technology outfit Axoni.

In the test, Markit generated smart contracts from CDS trade confirmations sourced from MarkitSERV embedded with economic terms, as well as computational logic to manage permissions and event processing. Real-time regulatory outputs included individual trade details, counterparty risk metrics and systemic exposure to each reference entity.

The group says it conducted 85 separate tests, including integration with external systems, network resiliency, and data privacy, with a 100% success rate.

Emmanuel Aidoo who leads the blockchain and distributed ledger function at Credit Suisse, says: “Our experiments with Axoni demonstrate that confidentiality and privacy can be preserved between bilateral parties on an immutable distributed ledger at scale."

The initiative lends credence to the words of Blockchain cheerleader Blythe Masters, CEO of Digital Asset Holdings, who told delegates at the Money20/20 conference in Copenhagen that blockchain technology would come online in the financial industry within the next two years, although it will take between five and ten years for the technology to become commonplace.

The DTCC is currently working with Digital Asset on a proof-of-concept test for the use of distributed ledger technology in repo markets.

Earlier this year, the depository pitched itself as the coordinator of an industry-wide investigation into whether distributed ledger technology is the answer to "certain limitations" in the post-trade process.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Bank of Ireland and BNP Paribas announce blockchain breakthroughs

Bank of Ireland and BNP Paribas announce blockchain breakthroughs

05 April 2016  |  22521 views  |  0 comments | 41 tweets | 53 linkedin
DTCC trials distributed ledger tech for repo market

DTCC trials distributed ledger tech for repo market

29 March 2016  |  5655 views  |  0 comments | 10 tweets | 7 linkedin
Icap hails blockchain proof-of-concept as post-trade breakthrough

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

15 March 2016  |  11045 views  |  0 comments | 21 tweets | 19 linkedin
Blockchain recruitment heats up at major banks and vendors

Blockchain recruitment heats up at major banks and vendors

03 March 2016  |  9914 views  |  0 comments | 21 tweets | 5 linkedin
R3 and 40 banks run parallel trials of five different blockchains

R3 and 40 banks run parallel trials of five different blockchains

03 March 2016  |  10441 views  |  0 comments | 24 tweets | 50 linkedin
JPMorgan tests blockchain for dollar transfers; strikes Starbucks deal

JPMorgan tests blockchain for dollar transfers; strikes Starbucks deal

23 February 2016  |  13779 views  |  0 comments | 8 tweets | 8 linkedin
Nasdaq to pilot blockchain for proxy voting in Estonia

Nasdaq to pilot blockchain for proxy voting in Estonia

12 February 2016  |  9997 views  |  0 comments | 15 tweets | 14 linkedin
It may take ten years, but blockchain tech will totally transform capital markets

It may take ten years, but blockchain tech will totally transform capital markets

03 February 2016  |  17755 views  |  0 comments | 25 tweets | 20 linkedin
Goldman and IBM join Digital Asset Holdings funding round

Goldman and IBM join Digital Asset Holdings funding round

02 February 2016  |  10597 views  |  1 comments | 13 tweets | 3 linkedin
JPMorgan begins blockchain trial - FT

JPMorgan begins blockchain trial - FT

01 February 2016  |  8591 views  |  0 comments | 19 tweets | 17 linkedin
Bank of America loads up on blockchain patents

Bank of America loads up on blockchain patents

29 January 2016  |  15457 views  |  3 comments | 27 tweets | 25 linkedin
DTCC calls for industry coordination on distributed ledger tech

DTCC calls for industry coordination on distributed ledger tech

25 January 2016  |  7671 views  |  0 comments | 10 tweets | 13 linkedin
Financial industry giants join $50m Digital Asset Holdings funding round

Financial industry giants join $50m Digital Asset Holdings funding round

21 January 2016  |  14848 views  |  0 comments | 13 tweets | 20 linkedin
R3 runs blockchain proof-of-concept with eleven banks

R3 runs blockchain proof-of-concept with eleven banks

20 January 2016  |  15623 views  |  1 comments | 33 tweets | 32 linkedin
Digital Asset Holdings opens London office; hires more bankers

Digital Asset Holdings opens London office; hires more bankers

15 January 2016  |  6480 views  |  0 comments | 9 tweets | 2 linkedin
Nasdaq sees in the New Year with first blockchain transaction

Nasdaq sees in the New Year with first blockchain transaction

04 January 2016  |  15207 views  |  1 comments | 36 tweets | 32 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.vasco.comvisit www.capgemini.comvisit www.sibos.com

Top topics

Most viewed Most shared
AXA launches blockchain to cover late flight compensationAXA launches blockchain to cover late flig...
12048 views comments | 16 tweets | 30 linkedin
European Commission makes fintech a priority in supervisory shakeupEuropean Commission makes fintech a priori...
8785 views comments | 34 tweets | 46 linkedin
hands typing furiouslyBlockchain is a new way of thinking?
7493 views 2 | 10 tweets | 1 linkedin
German central bank flags DLT weaknessesGerman central bank flags DLT weaknesses
7213 views comments | 17 tweets | 18 linkedin

Featured job

A minimum of £200K (not a limiting factor)
London

Find your next job