Global funds transaction network Calastone – the largest messaging system provider of its type – will be migrating its technology onto a full blockchain-enabled infrastructure.
The Calastone network connects more than 1,300 financial service organisations across 34 global markets processing over A$142 billion of trades and seven million messages each month.
Calastone believes it will transform the funds sector, enabling frictionless trading by making it possible for all trading entities and counterparties to connect, interact, process and settle transactions digitally.
In June, Calastone completed the first phase of its blockchain-enabled distributed market infrastructure proof-of-concept, which saw the firm test and verify the feasibility of using the technology to create a global marketplace for the trading and settlement of mutual funds.
The company has announced that in 2019 it would see the technology underpinning the core of its network move to a private and permissioned-based blockchain infrastructure.
The mutual funds market remained a sector challenged by operational inefficiencies, cost and risk, often resulting in an inability to meet fast evolving customer demands. The current requirement to replicate and reconcile records across the value chain created an overhead which dwarfed the benefits already offered by Calastone’s trading and settlement solutions, the company said in a statement.
Julien Hammerson, Calastone’s global chief executive, said: “As we build the business we consistently put innovation and customers first. Our vision remains to work with the industry to reduce the overall total cost of ownership by making it friction-free and increasing value for all market participants… [by using distributed ledger] we are providing our customers with the requisite tools they need, to be future-ready.”
Greg Bright is publisher of Investor Strategy News (Australia)