Wall Street banks complete blockchain test programme

Blockchain technology comes one step closer to establishing its place on Wall Street as banks successfully complete test programme in the equity swaps market

The prospect of blockchain technology playing a key role in financial services moved a step closer to reality earlier this week after banks including Goldman Sachs and JPMorgan successfully completed a six-month test programme in the $2.8 trillion equity swaps market.

The programme was managed by New York-based blockchain start-up Axoni, and used its AxCore blockchain software to keep track of swaps contracts after they were executed and record things like amendments or termination of the deals, stock splits and dividends. The programme was completed in a test environment with no real trades being processed.

Earlier this week, Axoni Chief Executive Officer Greg Schvey said “we are on a path to take this forward. We know the thing works now” after the programme achieved a 100% success rate. Other participants include the Canada Pension Plan Investment Board, Citigroup Inc., BNP Paribas SA and Credit Suisse Group AG.

It is expected that blockchain software could reduce the cost of banks’ back-office operations and speed up trade clearing and settlement times. “Fewer valuation disputes, less reconciliation and real-time access to data would benefit all of the industry,” Adam Herrmann, Global Head of Prime Finance at Citigroup, said in a statement.

Axoni is not alone in offering banks the ability to experiment with blockchain technology. Its competitors include Digital Asset Holdings, Symbiont, R3 and Chain.

[Bloomberg]
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