Bank of Canada's DLT Trial Shows Instant Securities Settlement Possible

The latest "Project Jasper" tests have shown that distributed ledgers are effective at automating securities settlements in real-time.

AccessTimeIconMay 11, 2018 at 2:00 p.m. UTC
Updated Sep 13, 2021 at 7:56 a.m. UTC

The latest "Project Jasper" blockchain trials have shown that distributed ledgers are effective at automating securities settlements in real-time, according to Bank of Canada and two partners on the project.

Announced in October 2017, the latest stage of the research effort moved on from its previous focus on payments to a proof-of-concept for "an integrated securities and payment settlement platform," CoinDesk reported at the time.

Working alongside the central bank were TMX Group, the financial services firm that operates the Toronto Stock Exchange, and Payments Canada, a non-profit that operates the primary payment channels within the country.

Now, a Reuters report published on Friday indicates that the three partners have found that, following tests of the platform, both assets and money can be tokenized and exchanged instantly, the report says.

Gerry Gaetz, president and CEO of Payments Canada, was quoted as saying:

“This shows that it is possible to deliver payments in a way that has never been done before – by directly swapping cash from buyers to sellers, resulting in instant settlements.”

There is a caveat, however. While blockchain is often touted as a way for enterprises to cut costs by removing middlemen and bringing in new efficiencies, the partners indicated that using the tech to settle securities transactions may not be such a money-saver.

Scott Hendry, senior special director at Bank of Canada, was quoted by Reuters as telling conference attendees yesterday:

“We’re still uncertain after doing this work that there are significant savings possible for participants. It’s not clear that all the participant dealers and banks are going to get a significant benefit out of this settlement system.”

Bank of Canada image via Shutterstock

DISCLOSURE

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

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Three Arrows Paper Trail Leads to Trading Desk Obscured Via Offshore Entities

As Three Arrows Capital collapsed under market pressure, its much-lesser known trading desk, TPS Capital, remained active, sources say. But a complex ownership structure might frustrate creditors' efforts to collect.

CoinDesk - Unknown
2
CoinDesk - Unknown
June Was Bitcoin’s Worst Month Ever

Plus, European crypto regulation comes into view.

CoinDesk - Unknown
3
CoinDesk - Unknown
What Traders Are Saying About Bitcoin's Biggest Monthly Loss in 11 Years

Poor macroeconomic sentiment, fears of inflation and systemic risks from the crypto market pushed the cryptocurrency below 2017’s highs.

CoinDesk - Unknown
4
CoinDesk - Unknown
Three Arrows Capital Files for Bankruptcy in New York Tied to British Virgin Islands Proceeding

A British Virgin Islands court ordered Three Arrows' BVI branch into liquidation earlier this week.

CoinDesk - Unknown