JP Morgan, Credit Suisse Among 8 in Latest Bank Blockchain Test

Axoni partners with JP Morgan and Credit Suisse to build a blockchain-based equity swaps processing prototype.

AccessTimeIconOct 18, 2016 at 3:28 a.m. UTC
Updated Sep 11, 2021 at 12:34 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Eight financial firms have completed a successful test of a smart contract prototype built by blockchain startup Axoni.

Announced today, participating institutions include five banks (JP Morgan, Credit Suisse, Barclays, Citi and one undisclosed participant), two financial infrastructure firms (Markit and Thomson Reuters) and business consultancy Capco.

The months-long equity swaps processing tests were organized by Axoni to show that the New York firm's software is capable of handling complex post-trade services such as margin payments and corporate action processing. Further, the project was designed to automate the time-consuming lifecycle management and synchronization tasks behind single stock, index and portfolio swaps.

Though Axoni has already announced two multi-party blockchain prototypes this year, today's news is being positioned as a step forward for the emerging startup.

Axoni CEO Greg Schvey said in a statement that the tests demonstrate how a blockchain can be used to increase the efficiency of even some of the more complicated post-trade asset services.

Schvey said:

"Complex contracts, a distributed market structure, and replicated workflows across many parties make blockchain technology a natural fit for equity derivatives."

The increasing complexity of the tests is part of a larger industry-wide push to move blockchain applications past prototype hype into real-world implementations.

Multiple data sources

To conduct the OTC equity swaps tests, Thomson Reuters first integrated its ethereum-based BlockOne hosted wallet with Axoni's software. The integration provided the group valuations and market data such as equity prices and LIBOR rates.

Smart contracts were then generated using information analysis firm IHS Markit's MarkitSERV processing platform, giving the banks a "synchronized, golden record" of transactions, a statement said.

To supplement the expertise of each of the project members, Axoni asked that Capco review each work-flow from beginning to end to ensure there were no redundancies.

Capco's managing principal and blockchain lead Benjamin Jessel told CoinDesk:

"We’re using smart contracts in a far more sophisticated way than what has been done in the past."

In total, 133 structured test cases assessed the capabilities of blockchain technology equity derivatives with a 100% success rate, according to the statement.

In addition to testing the functionality of the smart contracts, the working group conducted 50 tests of the underlying Axoni Core infrastructure.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which is an investor in TradeBlock, the parent firm of Axoni.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.