According to DTCC figures, there is a total of USD 6.7 trillion in outstanding contracts and that’s without including offsetting trades in the CDS market.
The first of its kind initiative demonstrated that the complex events inherent to CDS, including payments, amendments, novations and compressions can be efficiently managed on a blockchain in a permissioned, distributed, peer-to-peer network.
Altogether, the group included Bank of America Merrill Lynch, Citi, Credit Suisse, J.P. Morgan and blockchain-tech company Axoni, data provider Markit & DTCC.
The blockchain test commenced in early March 2016, with the participants conducting a diverse collective of 85 structured test cases to assess lifecycle functionality, integration with external systems, network resiliency, and data privacy.
Furthermore, the test also revealed that distributed ledger technology could enable further transparency for regulators who will be able to assess financial events in real time. Such events include individual trade details, counterparty risk metrics and systemic exposure to each reference entity.
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