Proof of concept first to integrate cash and
assets to enable settlement
on distributed ledger technology
TORONTO, May 11, 2018 /CNW/ - Payments Canada, the Bank of
Canada, TMX Group and Accenture
have demonstrated that the instantaneous clearing and settlement of
securities on-ledger is feasible, showing for the first time that
both central bank cash and assets can be tokenized to complete an
instant, end-to-end equity settlement on distributed ledger
technology (DLT).
Project Jasper is a collaborative research initiative between
Payments Canada, the Bank of Canada and TMX group to experiment with an
integrated securities and payment settlement platform based on DLT.
Jasper III, a continuation of previous work launched in
March 2016, is a proof of concept
that was delivered by Accenture, leveraging R3's Corda DLT
platform. It explores the impact and potential benefits of DLT on
broader Canadian financial market infrastructure.
"This proof of concept 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. "We continue to see how the
application of distributed ledger technology can help extend the
vision of payments innovation in Canada and potentially, one day, help promote
financial market integration, both nationally and
internationally."
Previous phases of Project Jasper focused on the clearing and
settlement of high-value interbank cash payments using DLT. Phase
III explores an integrated payments and securities infrastructure.
The proof of concept allowed clearing and "delivery versus payment"
settlement immediately, demonstrating that it's possible to
complete post-trade settlement on a DLT platform. The ability to
settle transactions immediately significantly reduces counterparty
risk and frees up collateral.
"We have witnessed an impressive achievement and an important
financial technology milestone for Canadian capital markets with
the successful transaction of tokenized securities and cash in
their basic forms," said John Lee,
managing director, Enterprise Innovation & Product Development,
TMX Group. "Many complex challenges remain as we move ahead, but we
look forward to the crucial collaborative work necessary to effect
substantive, transformative change in global markets."
Jasper III is currently the only proof of concept that maintains
privacy for market participants and their transactions by giving
only the parties involved in specific transactions the ability to
view the transaction history, without providing the same visibility
to other participants on-ledger.
"Maintaining privacy, as well integrating other assets onto the
same ledger as payments, would provide important benefits for the
financial system from the use of a DLT-based wholesale payment
system," said Carolyn A. Wilkins,
Senior Deputy Governor at the Bank of Canada. "Indeed, a key lesson from prior
phases of Jasper was that the benefits of a DLT-based wholesale
payment system likely lie in its interaction with the broader FMI
ecosystem. Such benefits would come from reaping economies of scope
and reducing costs to participants."
John Velissarios, Accenture's
Blockchain Technology & Security Lead, said: "Project Jasper
positions Canada as a leading
innovator, the first to fuse assets and fiat currency on ledger,
which is fundamental to moving towards production. Canada is the first developed market to focus
on a full-cycle, on-ledger, trade-settlement system ― laying the
groundwork for the Canadian financial market infrastructure to
collaborate with similarly positioned global partners to derive
new, mutually beneficial opportunities and benefits of DLT."
Jasper III initial findings were presented at the Payments
Canada SUMMIT by Andrew McCormack,
vice president of Payments & Technology at Payments Canada;
John Lee of TMX Group; Scott Hendry, senior special director of
Financial Technology at the Bank of Canada; and John
Velissarios of Accenture. A white paper detailing the
complete findings will be released later this year.
About Payments Canada
Payments Canada ensures that financial transactions in
Canada are carried out safely and
securely each day. The organization underpins the Canadian
financial system and economy by owning and operating Canada's payment clearing and settlement
infrastructure, including associated systems, bylaws, rules and
standards. The value of payments cleared by Payments Canada's
systems in 2017 was approximately $50
trillion or $200 billion every
business day. These encompass a wide range of payments made by
Canadians and businesses involving inter-bank transactions,
including those made with debit cards, pre-authorized debits,
direct deposits, bill payments, wire payments and cheques. Payments
Canada is a proud supporter of the
Catalyst Accord and the 30% Club.
About the Bank of Canada
The Bank of Canada is the nation's central bank. Its
principal role is "to promote the economic and financial welfare of
Canada," as defined in the Bank of
Canada Act. The Bank's four main areas of responsibility are:
monetary policy—keep inflation low and stable; financial
stability—promoting a safe, sound and efficient financial system;
currency—designing, issuing and distributing Canada's bank notes; and funds
management—acting as fiscal agent for the Government of
Canada.
About TMX Group (TSX: X)
TMX Group's key subsidiaries
operate cash and derivative markets and clearinghouses for multiple
asset classes including equities and fixed income. Toronto Stock
Exchange, TSX Venture Exchange, TSX Alpha Exchange, The Canadian
Depository for Securities, Montréal Exchange, Canadian Derivatives
Clearing Corporation, Trayport and other TMX Group companies
provide listing markets, trading markets, clearing facilities,
depository services, technology solutions, data products and other
services to the global financial community. TMX Group is
headquartered in Toronto and
operates offices across North
America (Montréal, Calgary,
Vancouver and New York), as well as in key international
markets including London,
Beijing and Singapore. For more information about TMX
Group, visit our website at www.tmx.com.
About Accenture
Accenture is a leading global
professional services company, providing a broad range of services
and solutions in strategy, consulting, digital, technology and
operations. Combining unmatched experience and specialized skills
across more than 40 industries and all business functions –
underpinned by the world's largest delivery network – Accenture
works at the intersection of business and technology to help
clients improve their performance and create sustainable value for
their stakeholders. With approximately 442,000 people serving
clients in more than 120 countries, Accenture drives innovation to
improve the way the world works and lives. Visit us at
www.accenture.com.
SOURCE Accenture