Financial services giant DTCC believes blockchain distributed ledger technology is not yet mature

Editor's note: DTCC has just released a white paper titled "Embracing Disruption - Exploiting the Potential of Distributed Ledgers to Improve the Post-Trade Environment". The white paper states that although the current financial market structure provides stable, reliable and traceable records, the financial market structure is still very complex and closed, and cannot be processed 24 hours a day, 365 days a year. DTCC believes that a series of assets with a distributed ledger with complete and traceable transaction records are safe.

Based on DTCC's research and analysis, DTCC recommends developing targeted opportunities to improve existing structures in certain identified areas where automation is limited or non-existent and new technologies offer significant advantages over existing processes. Opportunities to be developed include: master data management, issuance and servicing of assets/bonds, confirming asset transactions, transaction/contract confirmation, recording and matching complex asset types for which there is currently no effective solution, netting, collateral management, and long-term settlement.

The white paper reminds us that distributed ledger technology is not mature and has not been proven. My interpretation is that DTCC believes that distributed ledger technology is still only a top-level design, lacks a lower-level structure, and has not yet been directly connected to a complex financial environment. This view is very pragmatic and sincere. This view is at least not seen in R3's report.

In addition, DTCC has another important point, that is, blockchain technology may not be the solution to every problem, but we can regard it as an alternative. This is also objective and rational.

The implementation of distributed ledger technology requires the full collaboration of authorities and the industry

The idea of ​​global blockchain technology is to provide decentralized new governance rules to solve complex closed solutions. However, from the perspective of business logic, the application facilities should first impress the most credible central authority, and with its help and leadership, be applied in the industry under its jurisdiction. The author's popular point is to stand behind the leader and let the leader lead the introduction into the governance of the entire industry, so that the governance standards, technologies, and ideas of blockchain can be implemented. Otherwise, decentralization is likely to become anarchist. With the guidance of credible authoritative institutions, and then quickly mobilize industry institutions to participate in full, it is recommended to organize an alliance, first reach a consensus mechanism in terms of ideas, and then form a "constitution" for the blockchain and formulate implementation regulations. Bringing higher efficiency to the market, reducing social operating costs, and improving credit are the highest missions.

The author highly praises DTCC's rationality and constructiveness. As a financial market company that has existed for more than 40 years, DTCC is fully qualified to lead the financial industry in exploring the transformation of distributed ledger technology to the efficiency of the financial industry. Previously, the author wrote an article called "Five Cold Thoughts on the Blockchain Queen's Financing Event" to introduce DAH, a digital asset holding company founded by "Blockchain Queen" Matters. Coincidentally, DTCC is also an investor in Digital Asset Holdings (DAH). DAH is a company that develops distributed ledger technology for the financial services sector.

“Hyperledger” will soon be used frequently

The study found that DTCC has also joined the Linux Foundation, a non-profit organization that makes large-scale innovation possible through open source. DTCC and the Linux Foundation have assisted in a project called Hyperledger, a collaborative project to promote blockchain technology. Through this partnership, DTCC can play a key role in establishing corporate governance, setting standards for technology, and ensuring that the technology is open source. The author believes that Hyperledger will be used frequently in subsequent blockchain-related research. Hyperledger has a positive guiding nature and is easy to remember and recognize as a financial concept with technological content. Through Hyperledger, you can understand distributed accounting technology more quickly.

DTCC's embrace of blockchain technology is a positive inspiration for domestic financial securities institutions

According to public information, DTCC has nearly 40 years of experience and is the leading post-trading market infrastructure in the global financial services industry. It simplifies the complexity of clearing, settlement, asset services, global data management and information services for stocks, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products and insurance transactions. In 2011, DTCC processed securities transactions with a total value of approximately US$1.7 trillion. Its repository provides custody and asset services for securities worth US$39.5 trillion issued by 122 countries and regions. DTCC's global OTC derivatives transaction data repository records global transactions (including multiple asset classes) with a total notional value of more than US$500 trillion.

DTCC, the full name of which is the Depository Trust & Clearing Corporation, is a giant in the global financial services industry. It has two database storage centers in the Netherlands and Singapore. The management of transaction data is almost the lifeblood of DTCC. The security of transaction data should be a common concern of all financial institutions and the top priority of any financial institution leader. DTCC's investment in blockchain is a foregone conclusion. I believe that more and more financial services giants will accelerate their technical research and experiments in blockchain. I hope to attract the attention and attention of domestic financial groups.

Author: Chen Gang, Financial Uncle. Founder and Managing Director of Gaoronghui Capital. Senior financial media person, observer of GRH Blockchain and Digital Asset Laboratory. Producer of "Venture Capital Era". Consultant of many startups.