CLS, IBM team up for single shared DLT platform for financial institutions

FX settlement services provider CLS is teaming up with IBM on a proof of concept (PoC) for a distributed ledger technology (DLT) platform that will enable various participants from the financial services industry to deploy, share and consume services hosted on a shared distributed ledger network.

Dubbed “LedgerConnect”, the platform will allow banks, buy and sell side firms, fintechs and software vendors to access services in areas such as know your customer (KYC) processes, sanctions screening, collateral management, derivatives post-trade processing, and reconciliation and market data, among others.

DLT can help address a number of inefficiencies that currently plague the capital markets by providing a single, shared version of events and one implementation of common business functions. However, creating and operating individual DLT infrastructure for multiple services can be cost prohibitive and time-consuming for each vendor, bank, or consortium.

LedgerConnect addresses this problem by providing a single shared, enterprise-grade, and highly secured network on which multiple services can be deployed and consumed. This would allow financial institutions to focus on business objectives rather than creating multiple new blockchain applications, enabling them to realize operational efficiencies and cost savings across asset classes.

"Together IBM and CLS have been early pioneers in advancing blockchain solutions for the financial services space," said Marie Wieck, general manager, IBM Blockchain. "Building on the success of CLSNet and leveraging the strong relationship CLS has with the world's leading financial institutions, LedgerConnect is uniquely positioned as a blockchain marketplace for the financial services industry, which will accelerate innovation across the ecosystem with value added services for blockchain networks."

According to the official release, nine financial institutions, including Barclays and Citi, are participating in the PoC and have selected services from a number of vendors including Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRisk, SynSwap and Persistent Systems to participate in the PoC.

Upon the successful completion of the PoC, generation of market demand, and receipt of all necessary regulatory approvals, CLS and IBM plan to make the platform widely available to the industry.

Commenting on the project, Ryan Taylor, CEO of Dash Core Group said:

“I think cryptocurrencies will continue to grow regardless of whether big banks provide related services or not. There is too much economic value for their expansion to stop here. I view it more in the vein of further validation that value exists as banks identify ways cryptocurrencies can be useful to their customers and their own processes.”