Technology

Calastone Puts Funds Marketplace On Blockchain

Tom Burroughes, Group Editor, 21 May 2019

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Calastone reckons it is involved in the largest group of financial services groups ever to connect and deal on a live distributed ledger.

Calastone, the global funds transaction network, is harnessing blockchain, claiming its move could save the sector more than £3.4 billion ($4.33 billion) a year. 

The firm, which services more than 1,800 customers, has rolled out what it calls a Distributed Market Infrastructure. It said that this is the “largest group of financial services organisations ever to connect and transact on a live distributed ledger”.

The development comes under two years since Calastone said it had completed the first testing phase of using the distributed ledger technology, most famously associated with crypto-currency bitcoin, to develop a global funds marketplace. (The business made a prediction about the impact of blockchain on efficiency savings here.)

Blockchain, a form of distributed ledger technology, enables parties to transact without requiring third-party authentication. The technology has been advocated as a way of handling legal, financial, intellectual property and even medical record transactions. 

Calastone reckons that using its new system could save the funds industry billions of pounds a year in efficiency gains, all the more important as compliance burdens mount.

The firm has worked with a clutch of “early adopters” that have had access to the technology, including RBC Investor & Treasury Services, Bravura Solutions, Seven Investment Management, Multrees and Tilney Investment Management.  

The funds industry has been moving from manual processing of transactions over the years towards technology platforms. The Calastone system processes over 9 million messages and £170 billion of transactions each month.

Calastone is based in London and has offices in Luxembourg, Hong Kong, Taiwan, Singapore and Sydney. It has spoken to this publication previously about the development of funds markets around the world, and different uses of technology, such as in Asia.

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