Digital Asset CEO, Blythe Masters, has said organisations should be looking at what blockchain technology can do for them internally, as well as externally for clients.
At the helm of Digital Asset, Masters is implementing the most talked-about market infrastructure overhaul through blockchain technology through its work with the Australian Securities Exchange (ASX).
Speaking at Sibos 2018 in Sydney, the chief executive was asked about the benefits of blockchain, and diverting away from the usual responses such as data, settlement and reconciliation, which all have a positive impact for the client, Masters instead discussed the application of blockchain within organisations.
“The total addressable market for deploying this technology is much greater than people really understand,” explained Masters. “Reconciliation consumes a lot of messaging, resources and expense. Within the organisation, actually, the extent of requirements for internal validation, restraints, and controls and results of reconciliations is probably a factor of 100 – or even more than that – times as great of a burden.”
“Think about the distinction between the operations department, the risk department, the front office and trading department, command and control, reconciliation all the way back to the general ledger. These are all processes that can equally benefit from the technology that we are talking about here, where you need encourage separation, privacy or confidentiality or certain aspects.”
ASX plans to go live with its new equity post-trade system based on blockchain technology and designed by Digital Asset by the first quarter of 2021.
The blockchain project was heralded as a potential turning point for the post-trade industry at Sibos for the past two years and could serve as the basis for other market infrastructures to revamp their systems using the technology.
Digital Asset has hinted at working with other exchanges at present.
Masters added that she believed there would not be one single solution and interoperability will be important in the future.
“I don’t subscribe to the view that there will be a single solution or one approach to DLT,” she said, adding that the issue is currently being addressed. “To process transactions across and between these different ecosystems. It would be nice in theory. It’s important that the vendors of the technology work together, but also that the market operators – as they develop their tools – that they make a commitment to their participants, many who are shared. And they make a commitment to make sure the technology is compatible to meet their participants needs.”
Earlier this month a new test of the Digital Asset blockchain platform showed it processed upwards of 27,000 trades per second, far exceeding the latest prototype developed by market infrastructure service provider, DTCC.
The test, conducted by IT financial services consultancy GFT, confirmed the platform could support 27,000 trades per second for a sustained period of time, which equates to approximately 81,000 distributed ledger technology (DLT) transaction updates per second.