JPMorgan, Goldman Sachs Trial DLT for Equity Swaps

Financial firms including JPMorgan Chase and Goldman Sachs have carried out equity swaps over a DLT system.

AccessTimeIconNov 20, 2017 at 4:05 p.m. UTC
Updated Dec 12, 2022 at 12:43 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A group of major financial firms including JPMorgan Chase and Goldman Sachs has trialed the exchange of equity swaps over a distributed ledger (DLT) system.

Using the AxCore distributed ledger platform from startup Axoni, the pilot – which also included BNP Paribas, Credit Suisse and Citi – saw the banks process equity swaps from start to finish, according to an announcementhttps://www.prnewswire.com/news-releases/multi-firm-blockchain-implementation-for-equity-swaps-completes-second-phase-300559102.html from today. The trial looked at the potential of DLT to streamline the way swaps are made.

By carrying out trades across a network where all parties use the same valuation data and share the same books, in theory, payments can be processed nearly instantaneously and disputes over transactions will be less likely.

Greg Schvey, CEO of Axoni, said in a statement:

"Equity swap data is infamously complex and difficult to manage, making it a terrific fit for distributed ledger technology."

Following on from a proof-of-concept from late last year, the pilot tested tasks like trade creation, amendments, swap aging and dividends. The pilot also tested factors external to the trades, such as network performance and privacy, although it was conducted entirely a test environment. None of the trades were real and no money changed hands, according to Bloomberg.

Axoni used a standardized data structure for the swaps, built in collaboration with the International Swaps and Derivatives Association (ISDA). The collaborators also put together a governance framework to be used on a production network.

In May, Axoni closed a $20 million Series A round that saw participation from banks such as Citi and investors like Andreessen-Horowitz.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Axoni.

Markets miniature image via Shutterstock

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 offers all employees above a certain salary threshold, including journalists, stock 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.