The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced a digital collateral management platform.
DTCC and industry leaders will demo the new platform in a live event, “The Great Collateral Experiment” on April 23, representing a diverse cross-section of financial market assets and participants. It’s the first industry demonstration developed on DTCC’s digital ecosystem that launched last October – DTCC Digital Launchpad.
Collateral is an essential risk mitigation tool that helps support overall financial stability. But as the markets grow more complex and cost pressures rise, the demand for high quality collateral increases. Blockchains present a significant opportunity to streamline the flow of collateral across siloed infrastructure, unlocking major capital and operational efficiencies.
The new AppChain-based approach demonstrates the power of tokenized collateral management to:
- Increase the mobility and velocity of collateral movement globally,
- Increase capital efficiencies and liquidity for all participants,
- Facilitate the convergence of traditional and digital assets, and
- Enable an open digital liquidity ecosystem for market participants to deploy digital applications that enhance collateral operations.
The collateral management platform is an application on the DTCC AppChain, built atop LF Decentralized Trust’s Besu blockchain. The DTCC AppChain offers greater control over privacy, security, and data and uses DTCC ComposerX. DTCC is giving our participants a robust digital financial infrastructure to help navigate the fragmented data landscape that spans traditional and digital networks. The platform leverages a scalable, industry-driven framework rooted in open architecture and common standards.
“Our goal is to highlight how we can enable real-world, institutional-grade digital collateral market infrastructure,” said Nadine Chakar, Global Head of DTCC Digital Assets. “This platform is unique in that we’ve created something that’s more open, flexible, dynamic, and comprehensive than any previous digital collateral initiative.”
“Our work does not stop today,” added Chakar. “We plan to continue building on this collateral model, engaging with the industry and our regulators to develop the standard for tokenized collateral across global jurisdictions, working with the buy-side to give them more direct market access, and laying out the regulatory and legal path to implementation.”
“Collateral mobility is the ‘killer app’ for institutional use of blockchain – we’ve pulled together a coalition of technologists and market participants to successfully showcase how the speed and openness of this technology can safely and reliably unlock liquidity in traditional markets at scale,” said Dan Doney, Chief Technology Officer of DTCC Digital Assets. “By using smart contracts to automate the full range of collateral operations, we enable complex trade execution across markets in real-time at any time, even in volatile conditions.”
