DTCC Calls for Leveraging Ledger Tech to Solve Market Challenges

The Depository Trust Clearing Corporation has weighed in on blockchain-esq ledger technology – and has come out in favor of automating the clearing process and its applications in the market.

According to DTCC, the current state of distributed ledger technology today has its own challenges: its immature, unproven, has inherent scale limitations in its current form and lacks underlying infrastructure to cleanly integrate it into the existing financial market environment. Any failure in the highly orchestrated processing of transactions that occurs seamlessly every day could literally grind the worlds financial markets to a halt and disrupt economies globally, they said.

In its latest white paper, DTCC calls for leveraging distributed ledger technology to solve certain long-standing operational challenges. DTCC believes that a more mature, supported, integrated distributed ledger system has the potential to improve a number of existing financial market infrastructure limitations. DTCC is also announcing their recommendations for exploring infrastructures in certain areas where automation is currently limited or non-existent, including: master data management; asset/securities issuance and servicing; confirmed asset trades; trade/contract validation, recording and matching for the more complex asset types that currently do not have strong existent solutions; netting and clearing; collateral management; and, longer term, settlement.

The industry has a once-in-a-generation opportunity to reimagine and modernize its infrastructure to resolve long-standing operational challenges, said Michael Bodson, President and CEO at DTCC. To realize the potential of distributed ledger technology in a responsible manner and to avoid a disconnected maze of siloed solutions, the industry must work together in a coordinated fashion.

The paper, titled