Banks successfully test Blockchain on CDS

A group of seven banks and financial services providers announced that it had successfully tested blockchain technology and smart contracts to manage post-trade lifecycle events for credit default swaps (CDS). A press release by one of the participating firms, the Depository Trust & Clearing Corporation (DTCC), stated that “the first of its kind initiative demonstrated that the complex events inherent to CDS, including payments, amendments, novations and compressions, can be efficiently managed on a blockchain in a permissioned, distributed, peer-to-peer network.”

DTCC’s CEO Chris Childs said that “Blockchain and distributed ledger technology has the potential to revolutionize highly manual, complex processes across global financial markets. This test reinforces that collaboration among service providers will be critical to ensuring the technology is harnessed, assessed and implemented consistently. We look forward to future collaboration with the industry on innovative ways to leverage this technology to reduce costs and increase efficiencies in the post-trade process.”

The full statement can be found here and additional information on the technology is available here and in our dedicated area on Blockchain and other FinTech topics.

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