DTCC Tests DLT Project for Credit Derivatives Across 15 Major Banks


U.S.-based capital market company The Depository Trust & Clearing Corporation (DTCC) has initialized the testing phase of a project to re-platform its Trade Information Warehouse (TIW) on cloud and distributed ledger technology (DLT).

Per the company’s press release published November 6, DTCC’s TIW restructuring will involve end-to-end, user acceptance tests across 15 of the world’s leading banks.

As it stands, around 98 percent of all credit derivatives transactions in the global marketplace leverages on the event processing services of DTCC’s warehouse.

While DTCC’s proof-of-concept (PoC) in 2016 was participated by JPMorgan, Bank of America, Citi, and Credit Suisse, only Barclays was identified among the 15 banks involved in DTCC’s warehouse re-platforming.

As detailed in the release, the testing phase will involve the use of simulated use cases of the interaction between platforms, systems, and enterprises from a number of infrastructure providers, including MarkitSERV’s new post-trade OTC derivatives processor “TradeServ.”

According to Lee Braine of the Investment Bank CTO Office at Barclays, DTCC’s initiative and its participating banks will bring “distributed ledger technology to life in a demonstrable way that will enhance efficiencies and lower costs and risks for the industry.”

In addition, the release also outlined the roles of the project’s partners, among which includes IBM, R3, and Axoni, the consortium responsible for recoding the warehouse’s functionality using cloud service and DLT.

While IBM is reportedly leading the project’s “program management, DLT expertise, and integration,” Axoni is providing DLT infrastructure as well as smart contract applications anchored on its AxCore blockchain protocol. Meanwhile, R3 serves as the project’s “solution advisor.”

The release also emphasized the infrastructure provider’s massive presence in the global financial industry. In 2017 DTCC’s subsidiaries “processed securities transactions valued at more than U.S. $1.61 quadrillion,” while its depository has so far provided custodian solutions across “131 countries and territories valued at U.S. $57.4 trillion.”

As further noted in the release, roughly 40 million open over-the-counter (OTC) positions are maintained by DTCC’s Global Trade Repository service on a weekly basis, while approximately 1 billion communications are processed on a monthly basis through its licensed trade repositories.