Blockchain Distributed Market Infrastructure Proof-of-Concept for Global Funds Industry
Global funds transaction network Calastone has announced the successful completion of the first phase of its distributed market infrastructure proof-of-concept (PoC), to test the feasibility of using blockchain to develop a common global marketplace for the trading and settlement of mutual funds.
The tested distributed infrastructure model proved capable of processing transactions equivalent to a full day’s trading sourced from across Calastone’s global transaction network, which spans over 1,200 fund distribution and fund manager clients across 34 markets.
Campbell Brierley, Chief Information Officer of Calastone, said: “Successful initial testing, involving a large volume of trades across a fully representative global market universe, has given us a powerful understanding of how to optimise the distributed ledger technology to reduce the frictional cost of trading across the industry on a global scale. Placing the market on a blockchain effectively opens the door for potential efficiencies across the whole transaction lifecycle in excess of those that could be achieved via the optimisation of transaction processing alone. The encouraging results of the initial blockchain PoC allow us to look confidently to a future where participants currently connected to the Calastone Transaction Network could seamlessly migrate to this distributed market infrastructure.”
Calastone Deputy CEO, Ken Tregidgo explained: “The positive results of our PoC has shown that by using distributed ledger technology across the entire lifecycle of mutual fund transactions, from order placement through to the settlement and payment, industry participants could significantly benefit from simpler processing.”
Julien Hammerson, Calastone CEO commented, “Our vision is to enable friction-free trading for funds industry participants. Since launching in 2008, Calastone has pioneered ways to introduce operational and functional efficiencies for the industry from order routing, through to settlement, reconciliations, market data distribution and analytics. The scale and connectivity we have built in major markets around the globe makes us the natural partner to explore operational and infrastructural efficiencies across the global funds industry.”
The company has announced a second phase to its PoC, and is now engaged with a number of design partners drawn from its global client base.
Tregidgo concluded: “The design partners will help us test the model and understand the business challenges and requirements from a market participant perspective. It’s through technological innovation such as this that we aim to address the business and technical trading challenges faced by our customers across international markets,”