The Depository Trust and Clearing Corporation (DTCC) has created a sandbox to test groundbreaking technology for the digital asset industry.
Current estimates suggest tokenization presents a monumental business opportunity, with projections stating $16 trillion dollars in tokenized securities could be on digital rails by 2030.
As an open ecosystem, the DTCC Digital Launchpad will feature market participants, technology providers, and others working together to identify and collaborate on meaningful pilots that have a clear path to production. The sandbox will house a distributed ledger platform and scalable infrastructure for running high performance pilots trials.
“DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology,” says Frank La Salla, DTCC president, CEO and director. “As an industry-owned and governed infrastructure for the world’s largest capital markets, DTCC is uniquely suited to drive industry collaboration under the banner of a larger goal: building a digital asset ecosystem that’s as safe and sound as the one we have for traditional securities today.”
Nadine Chakar, global head of DTCC Digital Assets, says the objective is to move the industry away from siloed projects that have led to a fragmented technology estate with differing and conflicting standards, controls, and operational processes.
“We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach,” she says .“The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”
The first proof-of-concept from the launchpad, undertaken with Japan Securities Clearing Corporation (JSCC), explored how central counterparties (CCPs) could use tokenization to optimize the collateral management process for clearing members and their buy-side firms. In particular, it examined how margin calls and their associated processes could be automated, made more efficient and transparent for all participants using digital assets and smart contracts - or rules that automatically execute on a distributed ledger when certain conditions are met.
JSCC president & CEO, Konuma Yasuyuki, says: “By leveraging DTCC’s reusable blockchain-based infrastructure, we were able to jump-start our proof-of-concept, easily issuing digital assets such as cash, stocks, and bonds without needing to develop our own infrastructure. This allowed us to shift our focus to the initiative’s impact on our own business processes.”