DTCC has built a blockchain-powered clearing and settling platform for private equity market in the U.S. The company launched the platform after a study revealed that the blockchain aka distributed ledger technology (DLT) can be scaled up to 100 million trades per day to meet the equity market volumes of the U.S.
Accenture conducted this study in collaboration with technology companies R3 and Digital Asset. Through this study, it was revealed that the DLT can process 6,300 trades every second continuously for minimum five hours and hence can successfully fulfill the 115,000,000 daily trades when the market rates are at the peak. DTCC selected team of Accenture for the study after an RFP confirmed that the company possesses the best toolset and knowledge for conducting such a study.
In its announcement, DTCC stated, “Currently, public blockchains supporting crypto-currencies operate at single or double-digit per second performance, which until now was the only indication of the potential volume that a private DLT might be able to support.” Cryptocurrency blockchains are open to the general public. However, the DLT-based DTCC is accessible only to the users who have the permission.
Hence, it is the private and permission distributed ledger for the equity market. According to the managing director of business development and fintech strategy at DTCC Jennifer Peve, DTCC started the study with the intention to find out what exactly is required on a total volume/trading day and per second trading basis, Forbes reported.
The team working on the study ringfenced separate prototypes for two platforms. Then, they connected these platforms with the simulated trading nodes. Peve stated that two ensure that the platform of DTCC demonstrated completeness and robustness and they kept a high target that will be enough for measuring the performance and also maintain it for a long time.
At present, Australia Securities Exchange (ASX) is the only private equity market infrastructure that has implemented blockchain technology for clearing and settling equity trades, Global Custodian reported. According to DTCC, this study is just a starting point for using distributed ledger technology for settlement.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]