Calastone, a fund transaction network operator, announced on Monday that it would be migrating its client base to the blockchain in May of next year. A statement released by the firm indicates that it is describing its new system as Distributed Market Infrastructure (DMI).
“The launch of our DMI marks an exciting step for the industry in accelerating the digitisation of the funds sector and is a significant achievement for Calastone,” said company CEO Julien Hammerson. “The migration of our global network is the culmination of years of hard work and continued investment in innovation.”
The shift to that DMI will be quite an undertaking. According to Calastone, the company will be shifting more than 1,700 companies, operating in 40 different markets, to the blockchain.
How Will Zero-Fee Investment Platforms Impact Traditional Stock Brokers?Go to article >>
Calastone CIO: Blockchain Will Reduce Friction Points
When it goes live next May, companies using the DMI will be able to connect with buyers and sellers and perform transactions. Calastone claims that in doing so, they will also be reducing risks that were inherent to their old network.
“All participants benefit through the real-time view of each record and powerfully, from a data perspective, a single version of the truth,” said Campbell Brierley, Calastone’s Chief Innovation Officer. “Instantly this alleviates common friction points that exist today, including areas such as reconciliation and settlement, which are resolved automatically with all transactions being performed in the same environment.”
Aside from reducing risks, Calastone has also said that it believes a move to the blockchain could significantly reduce costs. The firm said that the cost of fund distribution could be reduced by as much as £3.4 billion ($4.33 billion) if there is wide adoption of the technology.
Calastone is not the only trading infrastructure provider to start using the blockchain. Last week, settlements service provider CLS announced that its blockchain-based payments service had gone live, with Morgan Stanley and JP Morgan using the solution.