Credit Suisse AM Tests Fund Transaction on Blockchain

The move is a further step in determining the viability of the crypto-linked technology in fixed-income markets.

The asset management arm of Credit Suisse has announced another blockchain success, using the technology to carry out a full end-to-end fund transaction with Portuguese financial institution Banco Best. The move is a further step in determining the viability of the crypto-linked technology in fixed-income markets.

The transaction was made through FundsDLT, a decentralized platform for fund transaction processing, developed in collaboration between a Luxembourg Stock Exchange, InTech, and KPMG Luxembourg.

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Credit Suisse said that the transaction included each part of the fund trade process, from delivery of the order to the processing of the trade, and showed that FundsDLT is able to connect with other blockchains, opening the door to “another milestone for transforming fund distribution.”

Claude Metz, head of shareholder services at Credit Suisse Fund Services (Luxembourg) SA, said: “Integration with FundsDLT was very efficient and straight-forward. Blockchain technology in connection with potential mutualized KYC (know your client) servicing will be a game changer for the investment funds business. This initiative benefits investors, distributors and transfer agents greatly from an operational efficiency standpoint, and we are only at the beginning of this most promising journey.”

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Banks also take part in this prototype testing

The test also makes Credit Suisse Asset Management one of the first asset servicing providers to process a full end-to-end fund transaction using blockchain technology. However, the move follows other banks in pursuing similar pilot projects.

Last year, North American-based financial services provider BMO Capital Markets, in collaboration with a pension fund, conducted the first pilot using blockchain to automate fixed income transactions in Canadian dollars.

Thanks to the technology that underpins cryptocurrencies, BMO was able to issue nearly $200 million of one-year floating rate deposit notes to the Ontario pension fund and used blockchain technology to mirror the transaction.

For this project, Banco Best developed the API integration and created a dedicated app to understand the full impact of the client experience.

Carlos Almeida, director of investments at Banco Best added: “This proof of concept is a great achievement and reinforces Banco Best’s commitment to be ahead of the curve. We want to be involved in blockchain technology to work together with all stakeholders in order to adapt and seize new opportunities in our business model, with the ambition to improve the customer experience and to promote financial inclusion.“

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