Investment company Vanguard with assets of $ 5.7 trillion has completed the first phase of pilot testing of settlements on asset-backed securities on the blockchain. This is stated in the press release of the company.
Symbiont blockchain startup, as well as The Bank of New York Mellon and Citibank, became Vanguard's partner in the pilot program. The initiative aims to simulate the full cycle of securities settlements using distributed ledger technology (DLT).
The project initiators plan to integrate smart contracts into the process of issuing and settling asset-backed securities ( ABS ) at the next stages of testing . Thus, it is supposed to achieve "expanding the flow of information, improving the pricing process and liquidity ratio, as well as automated execution of basic corporate actions."
Warren Pennington, head of the fintech strategy group at Vanguard, presented the pilot project as an attempt to create a “more efficient business model for the next generation of capital market participants.”
“By translating into numbers and optimizing the ABS release process, we will increase the speed and transparency of transactions while reducing costs and minimizing risks,” Pennington explained.
Mark Smith, head of Symbiont, considers the pilot project “an important step towards a fundamental shift in the infrastructure of capital markets through blockchain technology.”
“Already this year, for the first time, market participants will be able to see real DLT-based emissions,” Smith said.
Vanguard’s collaboration with Symbiont began back in December 2017. The first initiative was the introduction of blockchain technology to improve the distribution of data in price indices for funds with assets of $ 1.3 trillion. After a year and a half, in May 2019, the decision went into the commercial operation phase. In October of that year, partners began developing a blockchain platform for P2P currency trading.
By the end of April, Vanguard was serving the interests of 30 million customers with total assets of $ 5.7 trillion, for which 425 different funds were developed.
Recall, the regulated cryptocurrency exchange DeCurret, the three leading banks UFG Bank, Mizuho Bank and SMBC have joined forces to develop a digital settlement and clearing infrastructure in Japan.
