7 Wall Street companies have completed the latest blockchain technology testing, one step closer to practical application!

On April 7, 2016, seven Wall Street companies issued an announcement, announcing that they had successfully completed a test of using blockchain technology to replicate the credit default swap trading process.

The test is the latest sign that financial firms are accelerating their shift toward blockchain technology and distributed ledgers.

Chris Childs, CEO of DTCC’s OTC derivatives division, said the partnerships involved in the test were fundamental to its success.

Childs said:

“Blockchain and distributed ledger technology have the potential to transform highly manual and complex processes in global financial markets. This trial strengthens collaboration between service providers, which is critical to ensuring the technology can be utilized.”

Other members of the test include financial institutions - Bank of America, Merrill Lynch, Citigroup, Credit Suisse Group and JPMorgan Chase; as well as financial information company Markit and distributed ledger specialist Axoni.

The testing began in early March and included 85 structured test cases to assess network functionality, resilience and data privacy.

According to the announcement, a 100% success rate was achieved in all test cases throughout the test.

test

During the test, Markit was tasked with generating smart contracts from credit default swap trade confirmations, including incorporating economic transaction terms and rights management into a blockchain-based system.

The companies did not reveal which blockchain or distributed ledger system they used in the test, but given that only a small number of companies currently offer smart contract support, Symbiont and Ethereum are the most likely candidates.

The announcement stated that through this test, it can be seen that regulators can view financial activities in real time, including transaction details, counterparty risk indicators, and exposed reference entities.

Blockchain research work is on the rise

The DTCC just last week partnered with Digital Asset Holdings to test the use of blockchain technology in the transaction review process.

Separately, DTCC’s counterpart, ICAP, recently announced that they had completed their own post-trade blockchain trial in partnership with Axoni.

Many startups have also announced some major blockchain projects, seeking to provide blockchain technology solutions for financial institutions.

For example, the R3CEV banking consortium has announced that they are working on their own distributed ledger, Corda, which is inspired by blockchain but modified to meet the unique requirements of the financial industry.

Original article: http://www.coindesk.com/blockchain-credit-default-swaps-wall-street/
By Michael del Castillo
Compiled by: Kyle
Source (translation): Babbitt Information