Blockchain Can Support 100 Million Equity Trades Per Day – DTCC Study

Blockchain, News | October 18, 2018 By:

The Depository Trust & Clearing Corporation (DTCC) has announced the results of a benchmark study, which demonstrated that blockchain technology is capable of supporting volumes of more than 100 million trades per day.

The study, commissioned by DTCC and was conducted by Accenture with additional support provided by technology service providers Digital Asset (DA) and R3, showed that private blockchain can perform at levels necessary to process an entire trading day’s volume (US equities market) at peak rates, which equates to 115,000,000 daily trades, or 6,300 trades per second for five continuous hours. By comparison, public blockchains, such as bitcoin and ethereum, only operate at single or double digit per second performance.

During the 19-week study, Accenture built a network of more than 170 nodes to model the financial ecosystem of exchanges, market participants and broker/dealers supported by DTCC to test the capture of matched equities trades from exchange DLT nodes. DTCC then acted as the central counterparty (CCP) to maintain trading anonymity on the ledger, creation of netted obligations and settlement of the trades. The goal was to analyze blockchain’s ability to process the massive trading volumes of the US equities market, not the capabilities of individual commercial platforms.

DTCC noted that the study provided a starting point and only tested basic functionality. DTCC said that more tests will need to be done to see if blockchain can meet the resiliency, security, operational needs and regulatory requirements of its existing clearance and settlement system.

“As an early adopter of distributed ledger technology (DLT), we are encouraged by the results of the study because they prove that the technology’s performance can scale to meet the needs of markets of different sizes and maturity,” said Murray Pozmanter, Head of Clearing Agency Services at DTCC.

“This project answered key questions and built serious confidence in blockchain’s ability to drive large scale transformation,” said David Treat, Managing Director, Global Blockchain Lead, Accenture. “The close collaboration with the DTCC and our alliance partners, Digital Asset and R3, enables us to push DLT performance to new levels against real world requirements and conditions.”

“DTCC has been actively involved in DLT projects for over 3 years and during that time, we have seen technology platforms continue to mature, but concerns have loomed around the scalability of DLT,” stated Rob Palatnick, Managing Director of IT Architecture at DTCC. “This study is a natural next step in our efforts to advance the use of DLT, and we look forward to continuing to work collaboratively with the industry to identify new opportunities to use the technology to enhance the post-trade process.”