Calastone, a global fund transaction network, announces on Monday its entire global network of more than 1,700 financial organizations, across 40 global markets, will be migrated to blockchain in May 2019 through the company’s new Distributed Market Infrastructure (DMI). According to Calastone, the migration connects one of the largest communities of global financial organizations using distributed ledger technology, marking a significant step for the digitalizing of the funds sector. It was revealed:
“The DMI creates a global funds marketplace, in which buyers and sellers can connect and transact. It creates an ecosystem within which the trading, settlement and servicing of funds is friction free, eliminating ever-growing risk and costs for fund managers and investors, embedded within the current system. At the same time, organisations can leverage the open technology on which the DMI is built, allowing them to innovate, stay competitive and offer new services and investment opportunities better suited to the changing, more sophisticated needs of modern investors.”
Calastone also reported that it believes the overall global cost of fund distribution could be reduced by as much as £3.4 billion, achieved through the technological mutualization of the trading and settlement processes. While sharing more details about the fund, Campbell Brierley, Calastone’s Chief Innovation Officer, stated:
“Calastone’s DMI will totally transform the trading and servicing of funds and has the potential to realise significant long-term value. By bringing all trading relationships together, within our shared blockchain-enabled infrastructure, all participants benefit through the real-time view of each record and powerfully, from a data perspective, a single version of the truth. Instantly this alleviates common friction points that exist today, including areas such as reconciliation and settlement, which are resolved automatically with all transactions being performed in the same environment. By making friction-free trading accessible to all parties in the value chain, we are creating an environment that marks an inflection point for the future of the funds sector, optimised to meet the needs of customers and investors now and in the long-term.”
Julien Hammerson, Calastone’s CEO, went on to add:
“The launch of our DMI marks an exciting step for the industry in accelerating the digitisation of the funds sector and is a significant achievement for Calastone. The migration of our global network is the culmination of years of hard work and continued investment in innovation. Funds remain a vital investment vehicle, though remain hampered by continually rising costs and threat of competition, ultimately rendering the current system economically and operationally unsustainable. Through leveraging blockchain technology, the DMI transforms the way in which funds are traded, enabling an investment management community that can meet the changing needs of investors.”
