Bank Of Canada Releases Project Jasper Phase Three Findingsbr>
The Bank of Canada (BoC), the country’s central bank, has announced that the latest “Project Jasper” blockchain trials have demonstrated the feasibility of instantaneous equity settlement through distributed ledger technology (DLT).
Launched in March 2016, Project Jasper is a collaborative research initiative between Payments Canada, the Bank of Canada, TMX Group, Accenture, the R3 consortium, and seven commercial banks to experiment with an integrated securities and payment settlement platform based on DLT.
While phases one and two of Project Jasper focused on the clearing and settlement of high-value interbank cash payments using DLT, the third phase explores the impact and potential benefits of DLT on broader Canadian financial market infrastructure.
Jasper III is a proof of concept (PoC) that was delivered by Accenture, leveraging R3’s Corda blockchain platform. The PoC explored an integrated payments and securities infrastructure, and showed that it’s possible to complete post-trade settlement on a DLT platform. It also showed that both assets and money can be tokenized and exchanged instantly.
The PoC maintains privacy for market participants and their transactions by giving only the parties involved in specific transactions the ability to view the transaction history, without providing the same visibility to other participants on-ledger.
“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,” said Gerry Gaetz, President and CEO of Payments Canada. “We continue to see how the application of distributed ledger technology can help extend the vision of payments innovation in Canada and potentially, one day, help promote financial market integration, both nationally and internationally.”
However, Bank of Canada Senior Special Director Scott Hendry said that it was not yet clear if the use of DLT to settle securities transactions would lead to cost savings.
“We’re still uncertain after doing this work that there are significant savings possible for participants,” Hendry said. “It’s not clear that all the participant dealers and banks are going to get a significant benefit out of this settlement system.”