DTCC to Advance DLT Alternative Settlement System
Posted by Colin Lambert. Last updated: September 16, 2021
Following what it says was a successful “proof of concept” phase, the Depository Trust & Clearing Corporation (DTCC) is taking its Project Ion into a development phase following a successful prototype six-month long pilot with market participants. DTCC says it has the quantitative data and qualitative feedback to build out a production-ready workflow and roadmap for adoption.
The roll out would be subject to regulatory approval, however DTCC says the Ion platform is specifically modelled around a netted T+0 settlement cycle and will provide an alternative clearing and settlement option; offer inter-operability with DTCC’s existing platforms and services; and will be subject to rigorous regulatory standards.
The first phase will support bilateral deliver order transactions that will be initiated by pilot participants through client nodes hosted by DTCC. Once launched, the transactions will be processed through the Project Ion platform and then passed to DTC’s existing systems for settlement processing. The platform is anticipated to be launched in the first quarter of 2022, and will serve as a parallel book and infrastructure for limited bilateral transactions on DLT, with DTC’s existing systems continuing to remain the authoritative source of transactions.
“Cryptocurrency, digitised assets, DLT and other innovations increasingly are integral parts of the evolving financial services industry, and we are excited about the future opportunity in each of these areas,” says Murray Pozmanter, head of clearing agency services and global business operations at DTCC. “Project Ion has demonstrated that settlement in a T+1 or T+0 environment are effective use cases for DLT, and we look forward to working with our clients and the industry to launch the new platform.”
Project Ion’s functionality will be introduced in phases. Future iterations are expected to extend the platform’s functionality over time to realise the reconciliation efficiencies offered by DLT. Other phases are anticipated to include the provision of access through a client-hosted node and expanding the transaction types processed by the platform, the firm says.