The latest findings from “Project Jasper,” a flagship DLT experiment announced June 2017, show that distributed ledgers are an effective solution for the automation of securities settlements in real time, Bank of Canada as well as two other partners conclude.
This doesn’t come as a surprise for those already familiar with blockchain technology, or the myriad of cryptocurrencies using the same tech for payments, smart contracts, and other advanced implications.
What’s a little more interesting is that not only did Bank of Canada, TMX Group, and the Payments Canada, find that it was possible, but both assets and currency could be tokenized and exchanged instantly.
“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,” said Gerry Gaetz, president, and CEO of Payments Canada.
The instant settlements sound like a similar technology several cryptocurrencies have already been working on called atomic swaps, allowing users to exchange different cryptocurrencies without the need of a third party.
While this is definitely a win for distributed ledger technology, which many financial institutions are experimenting with to see if they can leverage to revolutionize business operations, the findings were inconclusive on if it would provide any substantial savings.
Bank of Canada Senior Special Director, Scott Hendry, said, “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,”
One of the key advantages of using cryptocurrency was the fact transaction fees were usually significantly cheaper than traditional methods, so perhaps further research will come to the same conclusion.
If not, a technology that instantly settles transactions at the same cost would still be a win for any enterprise looking to stay ahead in today’s market.