The Depository Trust and Clearing Corporation (DTCC), the largest system of securities settlement in the world, grows more deeply in the crypto with the introduction of a platform based on the blockchain for token collateral management.
The guarantee is a fundamental element of risk management on the financial markets, ensuring stability in the middle of market fluctuations. However, traditional systems often suffer from ineffectiveness due to fragmented infrastructure and late colonies.
DTCC said its new platform sought to meet these challenges in collateral tokenizing on blockchain rails, allowing real-time transfers and automation thanks to smart contracts, according to a press release on Wednesday. The platform works in the DTCC ecosystem, which was developed in addition to the Besu Blockchain of LF decentralized Trust.
Read more: why the tokenization of assets is inevitable
“Collateral mobility is” the Killer application “for the institutional use of blockchain,” said Dan Doney, Director of DTCC digital asset technology, in a press release. “Using intelligent contracts to automate the full range of collateral operations, we allow a complex execution of trade on the markets in real time at any time, even in volatile conditions.”
“This platform is unique in what we have created something more open, flexible, dynamic and complete than any previous digital collateral initiative,” said Nadine Chakar, global DTCC digital active manager.
The initiative comes as the tokenization of traditional financial instruments such as obligations, funds and other traditional investments has become one of the most popular use cases for blockchain technology. Several financial heavyweights such as BlackRock, CME Group and Fidelity have thrown their hat into the ring by pursuing advantages such as operational efficiency, faster establishments and increased transparency compared to the use of traditional financial plumbing.
DTCC will present the capacities of the platform during the event “The Great Collateal Experiment” on April 23, where industry participants will test the way tokénized assets can be mobilized on the markets. The company said that it also planned to engage with industry regulators and leaders to establish global tokenized guarantee standards.
