DTCC, the company that today settles the lion's share of U.S. securities, is moving forward blockchain.
The company reports that it has completed an early version of a blockchain that could one day support the trade of $11 trillion-worth of credit derivatives, as detailed by in an exclusive interview with coindesk.com.
At first, the goal of the project was to upgrade the infrastructure underpinning the DTCC's centralized Trade Information Warehouse (TIW) for over-the-counter derivatives, reducing the time it takes to clear derivatives trades. In order to do that, the company teamed up with IBM, R3 and Axoni. Now, the partners are turning their attention to testing it, and preparing it for migration of the TIW data in a compliant way.
"The exciting thing is that there's continued comfort in the progress of the overall application and environment. There are always challenges, but we call it the 'noise of progress'."
DTCC's chief technology architect
The man also reveals that Axo's AxCore protocol was originally derived from the public Ethereum blockchain, and that the DTCC's system uses the same Solidity smart contract language that powers its applications.
Still, AxCore has been modified to include a modular consensus mechanism that lets it tailor services to the specific needs of the DTCC, as well as submit real-time reports to both regulators and other counterparties. Unlike Ethereum, the DTCC implementation of AxCore does not include a token.
As reported, currently, the DTCC is working with regulators to align Axoni's built-in reporting database with regulatory requirements. According to Palatnick, the reports have to be as good as existing ones, but will be available on a continual basis as a result of the smart contract functionality. On top of that, the company is working with R3 and its network of over 100 global financial institution members to learn from standards-making bodies how to create "standards around what data should look like on a distributed ledger".
Following the launch, Axoni is to open-source the Axcore protocol.