DTCC, which processes more than $100 billion in securities each year, announced the successful completion of the first phase of its post-trade blockchain trial, with the second phase to be completed in June.

The Depository Trust & Clearing Corporation (DTCC) has completed the first leg of a post-trade distributed ledger trial in partnership with Digital Asset Holdings (DAH).

The DTCC, which oversees the clearing and settlement of more than $1 trillion in U.S. securities each year, said it would expand its distributed ledger technology trial — focused on the netting process for U.S. Treasury and agency repurchase agreement transactions — to include more participants in the next phase of the trial.

As part of the next steps, DTCC and Digital Asset will convene a Stakeholder Working Group (SWG) from which the two firms will solicit feedback on the technology and inform development progress.

In the statement, DTCC expressed great optimism about the future prospects of its blockchain work.

DTCC President and CEO Michael Bodson said of the test:

We are very pleased with the results of our buyback proof-of-concept work with Digital Asset and we believe this project validates the potential of this emerging technology.”

DTCC expects to complete the second phase of testing in June this year, after which the company will evaluate whether to move forward and develop a repo trading solution.

DTCC and Digital Asset Format have been working together to develop blockchain applications in the post-trading field since the beginning of last year. The securities settlement giant has reached cooperation agreements with several blockchain startups to explore how blockchain can transform transaction processing models.

In March 2016, in the first phase of the trial, the two companies began exploring how to put their business processes on a multimodal blockchain while integrating with existing internal processing systems.

According to the DTCC statement:

“While DTCC’s Fixed Income Clearing Corporation (FICC) currently provides matching and verification of repo trades, FICC is only responsible for the final leg of settlement of same-day trades, and the ‘initial’ settlement is not part of that system. Through this blockchain project, DTCC seeks to be able to incorporate the initial portion of same-day settlement trades into its own system, thereby further reducing settlement risk and costs for corporate members.”

Currently, DTCC is also working with R3 and Axoni to study other use cases of distributed ledger technology. According to previous reports by Babbitt, DTCC will use blockchain technology as the core infrastructure to rebuild the platform to manage and process credit derivatives worth up to $11 trillion - credit default swaps (CDS). Specifically, technology giant IBM and financial blockchain startups Axoni and R3 will use blockchain technology to develop and rebuild DTCC's transaction information warehouse (TIW).