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The three organizations said that they had developed an
integrated securities and payment settlement platform using a
distributed ledger, the same technology that underpins
cryptocurrencies like bitcoin, and found that cash and assets
can be tokenized to complete an instant settlement.
"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 body which
ensures financial transactions in Canada are carried out
securely.
However, Bank of Canada Senior Special Director Scott Hendry
told a payments conference in Toronto on Thursday it was not yet
clear if the use of blockchain technologies to settle securities
transactions would lead to cost savings.
"We're still uncertain after doing this work that there are
significant savings possible for participants," he said. "It's
not clear that all the participant dealers and banks are going
to get a significant benefit out of this settlement system."
The tests were the latest phase of an initiative called "Project
Jasper" that the Bank of Canada launched last year in
conjunction with TMX and Payments Canada.
Jasper is among dozens of fledgling efforts by financial
institutions around the globe to find ways to use distributed
ledger technology to boost the efficiency, transparency and
security of financial transactions.
Other technologies are also being explored to enable
instantaneous settlements. The European Central Bank is planning
to launch a new settlement system in November which it says will
allow transactions to be conducted in real-time, but does not
use distributive ledger technology.
(Reporting by Matt Scuffham, Editing by Rosalba O'Brien)
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