DTCC Digitalization in Action – Automation of the Asset Lifecycle with Corda

March 08, 2021

By: The R3 Team


The Depository Trust & Clearing Corporation (DTCC) is an industry-owned, industry-governed post-trade infrastructure provider that develops solutions to support market growth and the security of the global financial system. At CordaCon 2020, DTCC discussed its digitization strategy – which includes interfacing and collaborating with a variety of public and private blockchain providers, including R3.

The challenges

While most commonly known as a clearing house and Central Securities Depository in the US, DTCC is a global company with a suite of businesses across various asset classes and parts of the trade lifecycle, supporting segments including derivatives, wealth management, insurance, collateral and more. Its role includes helping to digitalize, modernize, improve and/or replace a wide array of legacy systems across the financial markets. DTCC is owned and governed by the clients it is helping to implement this modernization – and those clients are looking to it to lead and drive the industry’s technology evolution for an ever more digital world.

The solution

During the presentation, DTCC described in detail how its teams evaluate new technologies that can advance its clients’ business. Most of its work and research and development effort focuses on leveraging technology to realize business innovation opportunities. This includes seeking ways to apply new and emerging technologies like distributed ledger (DLT), cloud automation, security technologies and AI/machine learning to support its digitalization strategy. In terms of implementing the strategy, DTCC’s priorities are around rapid time to market and low cost. With each innovation, its goal is to prove either that a business concept works and should proceed, or does not work and should be allowed to fail quickly, with the team course-correcting or moving on to a different idea.

The DTCC speakers provided several compelling examples of its innovation approach in action. The company has created a development environment in the cloud that enables it to develop outside of its traditional guardrails and boundaries, focusing on proofs of concepts and prototypes of technology solutions. As part of these innovation efforts, DTCC has been evaluating tokenization via blockchain for some time, as a technology that can ultimately enable the future automation of the asset lifecycle. Prototypes currently under evaluation include the use of distributed ledger technology to provide a consistent system of record and transfer for private market issuers and related network participants, and a project to modernize and redesign current netting and settlement processes – both are using R3’s Corda platform.

The outcomes and benefits

To realize the full benefits of blockchain in the post-trade space, DTCC will keep working closely with clients to evaluate prototypes. Overall, DTCC is confident of advancing DLT to the next step in terms of meeting business needs, and expects there will ultimately be various DLT stacks within the core industry-owned infrastructure. Corda is anticipated to play a key role in that future.

To learn more, watch DTCC’s presentation at CordaCon 2020.