Report: Mutual Funds Could Save Billions With Blockchain

Shifting to a distributed, blockchain-based infrastructure could bring huge financial benefits to the asset management industry, research indicates.

AccessTimeIconFeb 23, 2018 at 5:00 a.m. UTC
Updated Sep 13, 2021 at 7:36 a.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 new report argues that switching to a distributed, blockchain-based infrastructure could bring significant financial benefits to the asset management industry.

The release from Calastone, a transaction network for the mutual funds industry, predicts that such a move could slash costs for the global mutual funds market by over $2.5 billion a year.

According to an FT report, Calastone's deputy chief executive, Ken Tregidgo, said that using a distributed market infrastructure would avoid different companies having to input the same data, thus saving time and reducing errors.

For the research, Calastone used data from a 2016 Deloitte study and calculated the potential basis point (BPS) savings in key global markets including the UK, Ireland, Luxembourg, Hong Kong, Singapore, Taiwan and Australia.

Julien Hammerson, Calastone's CEO, said the results highlight the benefits of using blockchain to automate the full life-cycle of mutual fund transactions, from order placement through to the settlement and payment process.

Work in bringing mutual fund transactions onto a blockchain is already underway. As far back as 2016, five major U.K. mutual fund operators partnered to explore blockchain technology's cost-saving potential in trading systems.

And, in September 2017, Nasdaq and Sweden's SEB bank revealed that they were testing a distributed ledger platform aimed at allowing participants to trade in real-time, thus simplifying the market's complex, paper-based transactions.

Piggy bank on coins 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 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.