Wall Street's processor DTCC launches blockchain platform to settle trades quicker

The DTCC (The Depository Trust & Clearing Corp) acts as the counterparty for trades in the US and underpins the entire public securities market. Project Ion, as it is called, was first created as a pilot program in 2020 and moved into a development program in September 2021.

DTCC says it is now processing an average of over 100.000 bilateral equity transactions per day in a parallel processing environment, and almost 160.000 on peak days. DTCC's subsidiary, The Depository Trust Company, remains the authoritative source for transactions.

Project Ion is designed to support T+0, or end of day, settlement cycles by using blockchain technology. Currently, stock market trades take two days to settle, although the Securities and Exchange Commission (SEC) proposed speeding this up in February 2022 in the wake of highly volatile meme stock trading.

As some have suggested, including Robinhood’s CEO Vlad Tenev, the T+0 settlement would prevent volatile markets like those seen with GameStop and AMC. Project Ion will be launched alongside DTCC's existing settlement solution for clients that are willing to use blockchain technology for faster settlement.

Several traditional finance companies such as Goldman Sachs and JPMorgan are dipping their toes into the blockchain industry, with the former president of the New York Stock Exchange suggesting that blockchain technology is going to produce a revolution for financial services.

DTCC's project, which is private and permissioned, is being developed in collaboration with the likes of Barclays, BNY Mellon, Charles Schwab, Citadel Securities, Citi, and Credit Suisse. The trust has also partnered with software provider R3 to launch Project Ion using R3’s Corda distributed ledger technology (DLT) software.

Faster payments are the norm

While the DTCC is focusing on processing US stocks faster, further up north, Canada prepares for the next payment gamechanger – the Real-Time Rail (RTR). As John Cowan, Chief Technology and Operations Officer at Payments Canada puts it, currently, Canada’s payment systems are not clearing and settling in real time, and they also require end users to expend effort on reconciliation as they lack expanded data fields.