Blockchain Successfully Tested in Credit Default Swaps!

Rage Review : Blockchain and distributed ledger technology have recently opened up the credit default swap market. Distributed ledger technology (DLT) allows domestic and foreign regulators to issue different authorizations to help with complex capital management. Blockchain technology can provide solutions for global regulators to share data, and global regulators should unite to provide regulatory services for the industry. DTCC organized the test, and participants included Bank of America, Citigroup and industry startup Axoni.

Translation: Nicole

Recent testing of blockchain and distributed ledgers at large financial institutions has proven that the technology can be successfully applied to the credit default swap market, U.S. Commodity Futures Trading Commission (CFTC) Commissioner J Christopher Giancarlo said today.

In a keynote address at the Cato Institute today, Giancarlo cited a recent “successful test” of blockchain in the credit default swaps market, organized by the Depository Trust & Clearing Corporation (DTCC) and involving Bank of America, Citigroup and industry startup Axoni.

J Christopher Giancarlo

Giancarlo said:

“I believe this test demonstrates the potential benefits of distributed ledger technology, and other similarly promising projects are in development.”

Giancarlo's test of 85 examples of distributed ledger network functionality is intended to explore how the technology could bypass regulators, who are also expected to come up with a 'safe' approach to regulation.

Giancarlo touched on a number of topics, from the collapse of Lehman Brothers to the emergence of Bitcoin and its underlying technology, blockchain, many of which he covered in a speech at the DTCC Blockchain Symposium in late March.

He said:

“For market participants, distributed ledger technology (DLT) can help with complex capital management by allowing regulators at home and abroad to issue different authorizations.”

From a regulator’s perspective, Giancarlo revealed that he believes global regulators need to collaborate to share data, and blockchain can provide a solution for sharing data.

To this day, Giancarlo is still concerned that different places have different regulatory systems. One guess is that while protecting interests, global regulators should unite to provide regulatory services to the industry.