DTCC Ion Platform Processing 100,000+ Transactions per Day
The Depository Trust and Clearing Corporation (DTCC), a vital post-trade custody and asset servicing firm, says its blockchain-based platform Ion is live and in production, operating in parallel with its legacy system. DTCC shares that it has selected R3’s Corda distributed ledger technology (DLT) as the protocol.
DTCC reports that the Ion platform is an alternative settlement platform leveraging DLT, processing an average of over 100,000 bilateral equity transactions per day, and almost 160,000 transactions at its peak. The DTCC subsidiary, The Depository Trust Company’s (DTC’s), classic settlement systems are currently remaining the authoritative record.
The permissioned DLT platform was developed in collaboration with many well-known financial institutions, including; Apex Clearing Corp., Barclays, BNY Mellon, Charles Schwab Corp., Citadel Securities, Citi, Credit Suisse Securities USA LLC, Fidelity Investments, Fnality International, Goldman Sachs & Co., J.P. Morgan, Morgan Stanley & Co, Raymond James Financial Inc., Robinhood Securities LLC, State Street Corporation, and Virtu Financial Inc.
The goal is to improve upon existing operations, providing a secure, resilient and scalable alternative for customers. DTCC says it will give clients the option to utilize the technology.
Project Ion is also being built to support a netted T+0 settlement cycle, as well as T+2, T+1, and extended settlement cycles.
Murray Pozmanter, Managing Director, President of DTCC Clearing Agency Services and Head of Global Business Operations, said the announcement is a milestone accomplishment for equity markets:
“Project Ion is an important step forward in advancing digitalization in financial markets and opens the door to exciting, new opportunities to drive greater efficiencies, risk management and cost savings for the industry. 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.”
Michele Hillery, General Manager of Equity Clearing and DTC Settlement Service at DTCC, said that Ion provides a parallel book and infrastructure for limited bilateral transactions, with DTC’s existing systems remaining the authoritative source of transactions.
“With firms across the industry at different levels of maturity around DLT adoption, DTCC is building this platform to provide optionality and flexibility to clients. Those who are ready to leverage the Project Ion platform can begin development efforts today while others can continue to use our classic solutions.”
DTCC did not indicate if or when Ion is expected to become the authoritative platform for transactions. DTCC said they are working on a “phased expansion of the platform” and will be enhanced and improved.
Future enhancements may include additional DTC activities and capabilities as well as the expansion of Project Ion to DTCC subsidiary National Securities Clearing Corporation (NSCC) to take advantage of NSCC’s central counterparty (CCP) trade guarantee for every cleared transaction.
In 2021, DTCC’s subsidiaries processed securities transactions valued at nearly U.S. $2.4 quadrillion.