DTCC Blockchain Platform Scheduled for Early 2019 Launch

An ambitious project from the Depository Trust and Clearing Corp. (DTCC) to replace the system that processes most credit derivatives trades with blockchain technology is now loosely scheduled to go live in the first half of 2019, WatersTechnology has learned.

At the beginning of 2017, it was announced that the DTCC was going to replace its Trade Information Warehouse (TIW) with a new system using distributed-ledger technology (DLT). The original go-live date for the platform was for the end of the first quarter 2018. Then, while speaking with WatersTechnology in October 2017, the DTCC said that it was planning for the end of 2018.

While the DTCC is zeroing in on its true launch for the TIW, sources familiar with the project say the latest hope for launch is for February 2019, or the first half of 2019, though nothing is officially set as yet.

In an interview with WatersTechnology in March 2018, Jennifer Peve, director of business development and office of fintech strategy for the DTCC, said that while the utility was “nearly complete with development” for the new TIW, with “a more expansive user acceptance program” to come in the summer “that will last through the rest of the year.” A spokesperson for the DTCC says that an “in-depth, industry-wide testing cycle” will likely begin “this quarter and into early 2019.” A full launch will follow successful user-acceptance testing.

Later this month, MarkitSERV, the derivatives processing giant owned by IHS Markit, will begin rolling out its new cloud-based TradeServ platform. The first iterations will focus on foreign exchange (FX) for non-deliverable futures (NDFs) and FX options.

MarkitServ will have to wait, though, to launch credit on the platform, as it will go live alongside the re-platformed TIW. 

Fits and Starts

The new TIW project is being led by IBM, with startup Axoni providing the DLT and smart-contract capabilities. R3, a DLT-focused consortium, is participating in an advisory capacity. TIW automates the record keeping, lifecycle events, and payment management for more than $11 trillion of cleared and bilateral credit derivatives, according to the DTCC, and provides lifecycle event processing services for about 98 percent of all credit derivative transactions across the globe.

While the hype around blockchain—and distributed ledger, at large—development has persisted, actual real-world, live use-cases have been rarer in the capital markets. For example, the Australian Securities Exchange (ASX) was hoping to go live with its new blockchain-based settlement system in 2020, but that date has already been pushed back into the first quarter of 2021. The DTCC, itself, has shelved a blockchain platform for clearing repurchase agreements. SIX Securities Services scrapped its securities processing project, while BNP Paribas paused its venture with SmartAngels to register investor payments using blockchain technology, a project it announced in 2016.

To help push its DLT project forward, Axoni received $32 million in Series B funding that was led by Goldman Sachs and Nyca Partners, and also included the likes of Citigroup, JPMorgan, Nex Group, Wells Fargo and Y Combinator, among others.