Quote from: logic-bet on January 09, 2017, 01:09:41 PM

$11 Trillion Bet: DTCC to Clear Derivatives With Blockchain Tech

The Depository Trust & Clearing Corporation (DCTT) has selected a series of firms to help integrate distributed ledger technology into its first large-scale, real-world application.

In the single, complex deal involving a distributed ledger consortium, a stock exchange, a tech startup, a legacy computer firm and an international collection of bulge bracket banks, the post-trade financial services company has begun the process of moving a significant part of its $1.5qn-worth of transaction workflow to a distributed ledger network.

With a contract announced today, IBM will help manage the process of moving $11tn worth of credit derivatives to a custom distributed ledger built by VC-backed startup, Axoni, under the advisement of banking consortium R3CEV.

The CEO of the DTCC's derivatives service subsidiary, Chris Childs, explained to CoinDesk how a network of nodes run by the counterparties of a transaction will be linked together to not only streamline post-trade processes, but save money as well.

Over the course of the next year, the partners will work collaboratively to "re-platform" the DTCC's existing Trade Information Warehouse (TIW) for post-trade processing to a distributed ledger custom-built for cleared and bilateral credit derivatives.

For an idea of the scale of this operation, the TIW covers all major global derivatives dealers and 2,500 buy-side firms in 70 countries, according to DTCC data.

The DTCC hasn't shared the exact amount of money it believes could be saved by moving the transactions to a blockchain or distributed ledger, but a 2015 report by Santander estimated the global savings to banks more generally speaking could be as high as $20bn a year.

If this first large-scale implementation of a distributed ledger proves successful, theres plenty of room to expand. The entire global credit derivatives market in 2016 was $544tn, according to the Bank for International Settlements, much of which is processed by the DTCC.

That's a very interesting piece of news there, logic-bet, thanks for posting it.

DTCC is an opaque and largely unknown company that is at the heart of the financial system. Here is a clip from the wikipedia page:

"The Depository Trust & Clearing Corporation (DTCC) is an American post-trade financial services company providing clearing and settlement services to the financial markets. It provides a way for buyers and sellers of securities to make their exchange in a safe and efficient way. It also functions as a central securities depository by providing central custody of securities."

https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation

"Clearing and settlement services" are a perfect data set for DTCC and a blockchain. DTCC is extremely important, note that they had issues during a NYC storm (hurricane) a few years ago, they now have a backup site. A blockchain looks to be very smart. And $20bn ain't peanuts!