Banking Consortium Successfully Tests New Block Chain on Equity Swaps Market

By:
Chris Gaetano
Published Date:
Nov 20, 2017
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A group of large banks successfully concluded a six-month test where block chain technology was used to keep track of swaps contracts after execution, according to Bloomberg. The consortium—composed of Goldman Sachs, JP Morgan Chase, Canada Pension Plan Investment Board, Citigroup Inc., BNP Paribas SA and Credit Suisse Group AG—wanted to see whether they could process and monitor these transactions without the use of a third party intermediary. The program, which was managed by blockchain startup Axoni, was able to not only keep track of the swaps contracts after they were executed, it also recorded things like amendments or termination of the deals, stock splits and dividends, all with a 100 percent success rate. 

The test itself was just a simulation, with no real trades actually happening on the software, but it does stand as proof of concept for using the technology to enable faster, easier securities transactions from one bank to another. A similar test is planned for the credit default swap market. 

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