Blockchain technology looks like it is transitioning from an all hype concept to reality. Particularly, the technology emerged as underlying cryptocurrencies but it is finding use cases beyond the imaginable. In this light, Calastone will switch fund trades to blockchain.
Calastone is a major player in financial technology and operates out of London. Particularly, the firm provides platform for the largest global funds transaction network. Specifically, it connects important financial organisations across the globe.
Calastone will switch fund trades to blockchain to reduce downtime and costs
Interestingly, the organisation serves over 1,700 customers in 40 countries and territories. As a result, the platform processes over 9 million messages and £170 billion of transactions each month.
However, the facilitating of funds transfer seems to be facing a situation where the costs are ever increasing.
Speaking to the Financial Times in an interview, Julien Hammerson, chief executive at Calastone said, “The switch will transform the way in which funds are traded.”
Particularly, the traditional platform involves bulky processes and a series of messages between users. As a result, there is a lot of downtime and friction that leads to rising costs.
However, blockchain automates most of the processes. As such the technology eliminates laboriousness and risk of human error in the transactions.
Interestingly, a Calastone research establishes that moving to blockchain could cut up to $4.3b year in global fund industry costs. Particularly, blockchain is able to achieve this feat by pooling trading and settlement processes.
DTCC on onboard the blockchain train
Interestingly, reports that Calastone will switch fund trades to blockchain are not unique. Depository Trust & Clearing Corporation (DTCC), Calastone’s American counterpart is also considering a similar move.
According to a news release, DTCC is onto the testing phase of its “ground-breaking project to re-platform its credit derivatives Trade Information Warehouse (TIW) on distributed ledger technology (DLT) and cloud.”
Particularly, the firm aims to utilize the technology to automate the various processes on its platform. DTCC anticipates the test period to complete by the first quarter of 2019.
Commenting on the developments, Chris Childs, CEO of DTCC DerivSERV said, “The transformation of DTCC’s Trade Information Warehouse using distributed ledger and cloud technology is truly a ground-breaking effort pushing the boundaries of technology use in the industry.”