SWIFT, the cooperative that operates a global messaging platform for banks, and a group of central securities depositories will cooperate to explore the potential of blockchain-inspired distributed ledger technology (DLT).
SWIFT and seven CSDs — Abu Dhabi Securities Exchange, Caja de Valores, Depósito Central de Valores, Nasdaq Market Technology AB, National Settlement Depository, SIX Securities Services and Strate Ltd — have signed a memorandum of understanding that commits them to working together to investigate the potential for DLT to bring efficiencies to post-trade processes.
SWIFT said it expects more CSDs to sign on to the effort.
A key aim is to push for DLT-based solutions to support existing common standards such as ISO 20022, according to SWIFT.
“The promise of the technology on paper is great, but it is currently missing a key component around standardisation,” said SWIFT head of standards Stephen Lindsay,
“There is clear value in re-using established business definitions and facilitating interoperability amongst DLT implementations, which this project will demonstrate.”
The MOU also includes a commitment to fostering R&D collaboration around DLT and developing additional use cases for the technology.
In December, the ASX announced that it would replace the Clearing House Electronic Subregister System (CHESS), which provides post-trade services, with a DLT-based solution based on technology developed by Digital Asset; a US firm that the ASX is a part owner of.
The ASX says the “next generation post-trade platform using contemporary technology” will offer benefits including cutting complexity for customers, and lower barriers to non-affiliated market operators and clearing and settlement facilities.
The ASX’s DLT system will run on a secure private network.