A handful of blockchain backers believe the technology will
become mainstream across the post-trade industry in a few
Around 40 senior executives from a mix of banks, bourses and
clearing houses gave the bullish outlook in a recent poll by
the Post-Trade Distributed Ledger (PTDL) group.
The survey follows a report by European securities regulator
ESMA last week, which said regulatory action for blockchain
technology at this "early stage" is "premature".
Post-trade services are required to execute the transfer of
ownership and cash after a securities trade has been made.
Custody and settlement along with clearing, trade reporting
and collateral management services are some of the key
A growing number of market participants believe blockchains
- records or ledgers of electronic transactions –
will boost transparency, shortern settlement cycles and
cut post-trade costs.
However, fears over adoption and hesitation about embracing
what is still a cutting-edge technology remain barriers to
Last week ESMA identified a number of legal and technical
challenges that would need to be overcome before blockchain
could be applied widely to securities markets.
Some of these challenges are related to the technology
itself, such as scalability and interoperability with existing
Other issues include governance framework, privacy and
Members of PTDL, including State Street, Euroclear, HSBC and
the London Stock Exchange, are working with regulators to build
up post-trade use cases.
ASX became an early blockchain pioneer when it announced at
partnership with Digital Asset at the start of 2016 to trial
the technology around equity clearing and settlement.
The Australian bourse is expected to make a decision later
this year on whether or not to deploy the distributed ledger
Meanwhile Clearstream recently revealed it has been working
with central securities depositories (CSDs) in South Africa,
Norway and Canada on a blockchain solution to ease cross-border