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.
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“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.
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