JPMorgan, Goldman Sachs Trial DLT for Equity Swaps

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.

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:

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.

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