The Depository Trust and Clearing Corporation (DTCC) and Digital Asset Holdings are developing a distributed ledger-based solution to manage the clearing and settlement of U.S. Treasury, Agency, and Agency Mortgage-Backed repurchase agreement transactions.
DTCC provides post-trade market infrastructure for the global financial services industry. Software company Digital Asset Holdings builds distributed, encrypted straight-through processing tools.
Such transactions are often in real-time while settlement, clearing and netting processes occur in multiple steps. DTCC’s Fixed Income Clearing Corporation (FICC) addresses some issues but fails to settle the beginning of same-day starting trades, meaning final settlement may take place outside FICC.
The DTCC/Digital Asset union hopes to simplify those final stages.
Distributed ledger technology allows for real-time information sharing and will attract trading partners interested in time, cost and risk reductions.
“Distributed ledger technology has the potential to revolutionize certain post-trade processes that are inefficient and complex, and repos are a great place to start,” DTCC President and CEO Mike Bodson said. “There are absolute opportunities to make clearing in this area much more efficient.”
“This collaboration further demonstrates Digital Asset’s commitment to enhancing post-trade processes for financial market infrastructure providers and market participants,” Digital Asset CEO Blythe Masters said.