Depository Trust and Clearing Corporation (DTCC), the world’s largest securities system, pushes deeper into crypto by introducing a blockchain-based platform for tokenized security management.
Security is a fundamental part of risk management in the financial markets, ensuring stability in the midst of market fluctuations. However, traditional systems often suffer from inefficiency due to fragmented infrastructure and hanging settlements.
DTCC said its new platform seeks to tackle these challenges by tokenizing the security of blockchain rails, enabling real-time transfers and automation through smart contracts, according to a Wednesday press release. The platform runs within DTCC’s appchain ecosystem, developed on top of LF Decentralized Trust’s BLOCKCHIN.
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“Security mobility is the ‘Killer app’ for institutional use of blockchain,” Dan Doney, Chief Technology Officer for DTCC digital assets, said in a statement. “By using smart contracts to automate the full spectrum of security operations, we enable complex trade performance across real -time markets at any time, even under unstable conditions.”
“This platform is unique in that we have created something that is more open, flexible, dynamic and comprehensive than something previous digital security initiative,” said Nadine Chakar, global leader of DTCC digital assets.
The initiative comes as a tokenization of traditional financial instruments such as bonds, funds and other traditional investments has become one of the hottest use cases for blockchain technology. Several economic heavy weights such as Blackrock, CME Group and Fidelity have thrown their hat into the ring and pursue benefits such as operating efficiency, faster settlements and increased transparency compared to using traditional financial plumbing.
DTCC will show the platform’s abilities at “The Great Collateral Experiment” event on April 23, where industrialists will test how tokenized assets can be mobilized across markets. The company said it is also planning to engage with supervisory authorities and industry leaders to establish global standards for tokenized security.
