New York-based post-trade financial services company, The Depository Trust & Clearing Corp. (DTCC), which processes all trades in the U.S. stock market, has launched a private blockchain project aimed at settling trades more quickly for clients, according to a press release Monday. The DTCC acts as the counterparty for most trades in the U.S. and underpins the entire public securities market.
Project Ion was first created as a pilot program in 2020 and moved into a development program in September. DTCC says it is now processing an average of over 100,000 bilateral equity transactions per day in a parallel processing environment, and almost 160,000 on peak days. DTCC's subsidiary, The Depository Trust Company, remains the authoritative source for transactions.
Project Ion is designed to support T+0, or end of day, settlement cycles by leveraging blockchain technology. Currently, stock market trades take two days to settle, although the Securities and Exchange Commission (SEC) proposed speeding this up in February in the wake of highly volatile meme stock trading.
Last year, Robinhood (HOOD) CEO Vlad Tenev said that T+0 settlement would prevent volatile markets like those seen with GameStop (GME) and AMC (AMC).
Project Ion will be launched alongside DTCC's existing settlement solution for clients that are willing to leverage blockchain technology for faster settlement.
Several leading traditional finance companies such as Goldman Sachs (GS) and JPMorgan (JPM) are dipping their toes into the blockchain industry, with the former president of the New York Stock Exchange claiming that "blockchain technology is going to rewire all financial services," as quoted in the Wall Street Journal on Monday.
DTCC's project, which is private and permissioned unlike many traditional blockchain networks such as Bitcoin and Ethereum, is being developed in collaboration with the likes of Barclays (BCS), BNY Mellon (BK), Charles Schwab (SCHW), Citadel Securities, Citi (C) and Credit Suisse (CS).
DTCC has also partnered with software provider R3 to launch Project Ion using R3’s Corda distributed ledger technology (DLT) software.
"Digitized assets and emerging technology like DLT are shaping and evolving the financial services landscape, and we remain committed to advancing innovative solutions that capitalize on opportunities, deliver new value and drive the industry forward," said Murray Pozmanter, managing director and president of DTCC Clearing Agency Services.
UPDATE (August 22, 15:46 UTC): Updated with additional context throughout.