DTCC (Depository Trust & Clearing Corporation; the world's largest clearing and settlement institution based in the United States), which has long been a global leader in the new DLT/blockchain technology field, and JSCC (Japan Securities Clearing Corporation) have collaborated to conduct a proof-of-concept on collateral use cases using digital assets and have published an overview report on the DTCC website below.
JSCC conducted its PoC to design and develop a cross-industry and cross-product collateral ecosystem by making full use of the DLT platform "DTCC Digital Launchpad" provided by DTCC and open source software (OSS).
When we imagine that innovative changes will take place, this is JSCC's mid to long-term PoC to explore with even traditional financial products how the expansion of tokenization in post-trade processing across global financial markets will create new value, how insurmountable issues until now can be resolved, and what a globally harmonized ecosystem could truly look like.
Since central clearing counterparties (CCPs) are the largest receivers of collateral due to their purpose of centrally managing risk and contributing to the robustness of markets, CCPs should explore the possibilities and potential of streamlining and optimizing collateral schemes using digital assets. Such schemes should not be fragmented, but globally standardized and interoperable. Against this background, JSCC believes it is meaningful for global financial market infrastructures (FMIs) to work together in conducting a future-oriented PoC.
Looking ahead, other areas of potential exploration include use cases such as collateral exchanges between digital assets issued across different cross-border networks (interoperable atomic swaps) and lifecycle event processing of digital assets held as collateral (advancements with bond coupon and stock dividend payments).
Background on JSCC's past DLT-related initiatives
- 2017: JSCC started research of DLT (Distributed Ledger Technology) for clearing and settlement operations applications.
- January 2023: Launched DLT production system for the delivery and settlement operations of rubber futures contracts; now preparing the second phase to expand with the delivery and settlement operations of precious metals.
CCP's Blockchain Technology Utilization - Implement for Rubber Futures Settlement by Delivery as a First Shot - - October 2023: Joined Hyperledger Foundation (*) (open source community around DLT)
JSCC Joins Hyperledger Foundation - March 2024: Joined Hyperledger Besu Financial Services Working Group
Participation as a founding member of the "Hyperledger Besu Financial Services Working Group"
- Renamed to LF Decentralized Trust in September 2024.
