It’s another significant endorsement for the technology, which promises to radically speed up and simplify trade clearing and settlement -- the process of swapping assets between buyers and sellers. Last week, DTCC was among a group of investors that bought stakes in Digital Asset Holdings, which is developing financial applications for blockchain, at the same time the startup won a contract to handle stock settlement in the Australian stock market.
Blockchain could help DTCC leapfrog the industry’s current best-case scenario for speeding up U.S. stock and bond trades. The present target is shifting to two days from three. Reducing settlement times frees up capital at brokerages and ensures investors get their money faster after a sale. DTCC said Monday that while the technology has its limitations, Wall Street should its explore its application to markets
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The industry should seize the emergence of this technology as an opportunity to assess how to modernize and significantly lower risk and cost,” DTCC, which also clears bond transactions in the U.S., said in a research paper. “DTCC strongly believes that the financial services industry has a once-in-a-generation opportunity to reimagine and modernize its infrastructure to address long-standing operational challenges
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