Large Banks Complete Testing the Project on Using Blockchain for Equity Swaps
November 21, 2017
Blockchain took another step on the way to changing financial services after passing the test organized by the representatives of Wall Street. Goldman Sachs and JPMorgan Chase banks conducted testing of the technology in the equity swap market for six months and it ended successfully. Citigroup, BNP Paribas and Credit Suisse also participated in the testing.
The object of the testing was a program based on the startup Axoni's blockchain AxCore, which kept data records of completed swap contracts. The monitored information included data on all amendments to the transactions and their termination, share splits and dividends. The success rate was 100%, Axoni said in its statement. During the testing there were no real deals and real money did not move.
"We are on the way to further use of the blockchain. Now we know how it works," said Axoni CEO Greg Schvey.
The representatives of Wall Street got interested in the blockchain technology as it is possible to reduce the cost of banking operations, as well as increase the speed of transactions with its help. Billions of dollars, which are reserved by banks for conducting transactions, can be released and used for other purposes if the estimated time decreases from days and weeks to several minutes.
Axoin is not the only startup whose services large banks use for the development of blockchain solutions. Their competitors are Digital Asset Holdings, Symbiont, R3 and Chain.
Due to the characteristic features of blockchain technology, the speed of transactions can be reduced by a factor of several dozens, as all participants become members of the common network and have access to a distributed ledger that is updated in real time.
"All industry participants will benefit from less disagreement about the price, less controversial situations, and access to any information in real time," said Adam Herrmann, one of Citigroup executives.