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Four entities show feasibility of instantaneous equity settlement via DLT

BBR Staff Writer Published 14 May 2018

Payments Canada, the Bank of Canada, TMX Group and Accenture have showed the feasibility of instantaneous equity settlement through distributed ledger technology (DLT).

The partnership has proved that the instantaneous clearing and settlement of securities on-ledger can be executed, and demonstrated that that both central bank cash and assets can be tokenized to complete an instant, end-to-end equity settlement on DLT.

Project Jasper is a collaborative research initiative launched by the entities to experiment with an integrated securities and payment settlement platform based on DLT.

Jasper III, which is a continuation of earlier work launched in March 2016, is a proof of concept that was delivered by Accenture with the support of R3’s Corda DLT platform.

The research initiative has been launched to study the impact and potential benefits of DLT on Canadian financial market infrastructure.

Payments Canada president and CEO Gerry Gaetz said: “This proof of concept shows that it is possible to deliver payments in a way that has never been done before – by directly swapping cash from buyers to sellers, resulting in instant settlements.”

Earlier phases of Project Jasper concentrated on the clearing and settlement of high-value interbank cash payments by using DLT.

Phase III studied an integrated payments and securities infrastructure. The proof of concept enabled clearing and delivery versus payment settlement instantly, showing its ability to complete post-trade settlement on a DLT platform.

The instantaneous settlement of transactions will help in reducing counterparty risk and frees up collateral.

At present, Jasper III is said to be the only proof of concept that maintains privacy for market participants and their transactions.

It facilitates to view the transaction history by the only parties involved in specific transactions, and will avoid the same visibility to other participants on-ledger.

Bank of Canada senior deputy governor Carolyn Wilkins said:  “Maintaining privacy, as well integrating other assets onto the same ledger as payments, would provide important benefits for the financial system from the use of a DLT-based wholesale payment system.”


Image: Accenture building in Reston Town Center in Reston, Virginia. Photo: courtesy of BLM Platinum.