The US Depository Trust & Clearing Corporation (DTCC) has selected IBM, in partnership with Axoni and R3, to provide a distributed ledger technology (DLT) framework to drive further improvements in derivatives post-trade lifecycle events.

The firms will collaborate to re-platform DTCC’s Trade Information Warehouse, which currently automates the record keeping and lifecycle events for more than $11 billion of derivatives, building a blockchain solution for post-trade processing based on existing capabilities and interfaces with technology providers and market participants.

The new solution will enable DTCC and its clients to further streamline, automate and reduce the cost of derivatives processing across the industry by eliminating the need for disjointed, redundant processing capabilities and the associated reconciliation costs.

IBM will lead the initiative, provide programme management, DLT expertise and integration services. Axoni will provide distributed ledger infrastructure and smart contract applications, with R3 acting as a solution advisor.

Development is expected to begin in January 2017 and build on Axoni’s AxCore distributed ledger protocol which will be submitted to Hyperledger, an open source collaboration project from Linux, when the solution goes live, anticipated in early 2018.

Chris Childs, CEO of DTCC Deriv/SERV, said: “IBM, Axoni and R3 offer valued DLT expertise as well as a strong commitment to the Hyperledger community and industry standards. We are pleased that they have chosen to leverage their collective expertise and collaborate with us on this initiative, which will allow us to build the best solution for the marketplace while minimizing cost to the industry and expediting our speed to market.”

The solution has been developed with input and guidance from a number of market participants including Barclays, Citi, Credit Suisse, Deutsche Bank, J.P. Morgan, UBS and Wells Fargo, and key market infrastructure providers, IHS Markit and Intercontinental Exchange.

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