May 19, 2020
Bank of Canada finds blockchain can be used to clear and settle stocks
Project Jasper, of which Bank of Canada is a participant, has found that distributed ledger technology (DLT) can be used to clear and settle stocks
DLT, commonly known as blockchain, is currently being explored across myriad industries as a means to simplify data flow whilst incorporating trust and security at every step.
Project Jasper, whose membership is comprised of the Bank of Canada, Payments Canada, TMX Group, Accenture, and R3, is currently developing and testing a DLT-based system which can be integrated into legacy systems.
Secondary goals of the project include demonstrating the financial benefits of the streamlining effects of blockchain, as well as experimenting with ways to minimise the disruption that integration of this technology could cause.
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The latest experiment, though successful, did not provide any clear financial benefit at this stage, although Ledger Insights said this is due to the challenge of comparing results against existing complex, interconnected systems currently in place.
Project Jasper’s Phase III report, published on 22 October, concludes that significant expansion of scope would be necessary for the extent of the new system’s real benefits to be realized.
“DLT is a promising technology that has the potential to reduce costs for participants and open new opportunities," said Scott Hendry, Bank of Canada’s senior special director of financial technology, according to BNN Bloomberg.
“Work remains to be done to determine how it can be set up to maximize the benefits for the whole financial system.”