The Depository Trust and Clearing Corp (DTCC) announced on Monday that it will be replacing its existing databases with a blockchain-based system, in a process that is expected to see the new system in use next year. The company is a post-trade service provider that records and reports information for virtually all securities trading activities in the United States. DTCC has selected IBM to work on the project in collaboration with tech firms R3 CEV and Axoni, with work scheduled to begin later this month and conclude sometime in the first part of 2018.
According to DTCC, the effort has received input from some of the largest players in the market, including major financial entities like Wells Fargo, JPMorgan Chase, UBS Group, Barclays, and Citigroup – among others. The project announcement comes on the heels of last year’s successful test of the blockchain, in which a number of banks worked with DTCC to prove the distributed ledger technology’s benefits. As DTCC president and CEO Michael Bodson observed,
"The test showed that distributed ledger technology could handle all the various types of events processing needs for credit default swaps and it showed that it could be done at a lower cost point than what can be done with our existing infrastructure."
When implemented, the project will replace a system that is responsible for processing roughly $11 trillion in credit default swaps, and will represent a significant step forward in Wall Street’s adoption of the emerging technology.