Five major British mutual fund operators have partnered to explore blockchain technology's cost saving potential in trading systems.
As reported in the Financial Times, Schroders Investment Management and Aberdeen Asset Management have initiated the project, along with Columbia Threadneedle Investments. Aviva Investors and Henderson Global Investors are also said to be involved in talks about the initiative.
Together the funds – which manage over £1tn ($1.44tn) in assets – are exploring the possibility that blockchain or distributed ledger tech can save billions by removing intermediaries and reducing manual processing of trades, which can take days to complete with current systems.
According to the FT, the firms are looking into various applications for the technology, including the direct trading of illiquid securities.
Financial institutions have been coming together in numbers over the last year to explore the possibilities of blockchains, joining consortia such as R3, which now has over 40 banks on board. However, this would seem to be the first time in which fund houses have come together to investigate the technology.
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