DTCC Eyes Late 2018 for Blockchain-based Derivatives Reporting Platform

The Trade Information Warehouse, operated by the Depository Trust and Clearing Corp. (DTCC), is being replaced by a system based on blockchain technology, which is being jointly built by IBM, Axoni and industry consortium, R3.

The facility handles the bulk of reports and lifecycle events for $11 trillion of credit-default-swap trades, and the technology overhaul was first announced by the DTCC in January 2017. It will operate in shadow mode from the first quarter of 2018, as per previous media reports, although DTCC representatives have confirmed that it will be fully live by the end of 2018.

While interest in blockchain—or distributed-ledger technology (DLT)—has touched nearly all aspects of the capital markets, Tony Freeman, executive director of industry relations at the DTCC, says that the technology is “highly suitable” for exactly this type of use-case.

“It was made for it, really,” he says. “It will have a cost impact, because it is an expensive product to run right now, and then you have this coordination issue, where you have a lot of people needing access to the data at the same time. Hopefully, a DLT environment, in the cloud, can make it more accessible.”

The Trade Information Warehouse project is one of a number of DLT initiatives underway at the DTCC, which has engaged with the technology for several years.

It has also partnered with Digital Asset Holdings, a DLT-focused company headed up by former JPMorgan commodities chief, Blythe Masters, which announced the completion of a $40 million Series B funding round on October 15. That project will focus on how DLT can be applied to repo clearing.

“You’re bringing an efficiency to the market that’s been highly manual before, and when you take a step back, it could be done a lot better if the right technology were put in place,” Freeman says.