The Depository Trust & Clearing Corporation has announced the results of its U.S. Treasury Collateral Network tokenization pilot, finding “robust functionality and potential” for distributed networks.
Four investors, four banks, two central counterparties and three custodians participated in the experiment, which tested 10 different use cases. The financial privacy-focused Canton Network was tapped for the effort.
“The successful completion of this pilot proves that tokenized assets could be leveraged to optimize collateral,” Kelly Mathieson, chief business development officer at Digital Asset, a firm involved in the pilot, said in a statement.
The pilot was conducted between June and July to test the feasibility of “complex real-world transactions” like cloning and settling a “digital twin” for U.S. Treasuries. It also looked into real-time margin calls, asset recalls and other portfolio management services.
“In hypothetical default scenarios, secured parties seized pledged assets, transferring ownership in atomic transactions, ensuring legal certainty and control,” DTCC wrote in a press release.
Nadine Chakar, longtime blockchain advocate and global head of DTCC Digital Assets, noted in particular that the system “significantly” improved liquidity and collateral optimization.
DTCC has been experimenting with blockchain since at least 2020, when it launched a pilot program called Project Ion looking to test out alternative settlement methods. The firm is responsible for clearing several hundreds of trillions of dollars worth of transactions annually.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.