Blockchain Marketplace For Banks Developed By CLS And IBMbr>
Forex settlement provider CLS, tech giant IBM and nine major banks are testing a blockchain platform designed to enable vendors and financial institutions to deploy, share and consume services hosted on a shared distributed ledger network.
Dubbed “LedgerConnect,” the platform aims to make it easier and cheaper for financial firms to use blockchain-based software. It will offer applications and services provided by different vendors in areas such as know your customer (KYC) processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation and market data.
Nine financial institutions, including Barclays and Citi, are participating in the proof of concept (PoC) and have selected services from a number of vendors including Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRisk, SynSwap and Persistent Systems.
“It can be cost prohibitive and time-consuming for each vendor, bank, or consortium to create and operate its own unique distributed ledger technology (DLT) infrastructure for multiple services when proven technology already exists,” CLS said. “LedgerConnect aims to solve this problem by providing a single shared and highly secured network on which multiple services can be deployed and consumed. This allows financial institutions to focus on transforming business processes rather than creating multiple new blockchain applications, networks and services in silos that could lead to increased interoperability costs and complexity.”
Based on the IBM Blockchain Platform and Hyperledger Fabric technology, LedgerConnect is designed for regulated and security-conscious enterprises and will be available across asset classes. CLS said they are also planning to support additional blockchain technologies in the future, based on market demand and developments.
Alan Marquard, Chief Strategy and Development Officer at CLS, said that LedgerConnect is part of CLS’s strategy to explore how they can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in financial markets.
“We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks,” Marquard said.
Keith Bear, IBM’s vice president for financial markets, said that LedgerConnect will address a connectivity gap, where upstart FinTechs and large tech firms alike are faced with the cost and complexity of spinning up their own distributed networks so banks can consume their various applications.
“Having a secure network and proven infrastructure allows an app store kind of model, where banks can identify applications from certified fintech and software providers and deploy these apps over a seamless blockchain network,” Bear said.