DTCC’s blockchain T+0 settlement platform hits milestones in direct parallel production

The Depository Trust & Clearing Corporation’s (DTCC) has announced that its distributed ledger technology (DLT) based settlement platform has gone live in a parallel production environment, processing up to 160,000 transactions per day.

Project Ion has been in the works since May 2020, aiming to support an online T+0 settlement cycle, as well as T+2, T+1 and extended cycles.

The project runs parallel to existing settlement infrastructure, and processes an average of over 100,000 bilateral stock transactions per day, and almost 160,000 transactions on peak days. The Depository Trust Company’s (DTC) classic settlement systems remain the authoritative record.

The project has been developed in collaboration with the likes of BNY Mellon, Citi and JP Morgan.

“This is a milestone for the equity markets and reflects the deep level of collaboration and partnership between DTCC and our clients,” said Murray Pozmanter, CEO, president of DTCC’s clearing agency services and head of global business operations.

“Project Ion is an important step forward in promoting digitization in the financial markets and opens the door to exciting, new opportunities to drive greater efficiency, risk management and cost savings for the industry. Digitized assets and emerging technologies such as DLT are shaping and evolving the financial services landscape, and we remain committed to promoting innovative solutions that leverage opportunities, deliver new value and drive the industry forward.”

The aim of Project Ion – the DTCC said – is ultimately to offer a “flexible, secure and scalable alternative settlement service” to customers, with the ability to leverage DLT for those firms that want to take advantage of the new technology.

DTCC partnered with leading enterprise technology provider R3 to develop and launch the Project Ion platform leveraging R3’s Corda DLT software.

The project has been timely, given the push for industry to consider T+0, balanced with industry backlash over the benefits of end-of-day netting.

With the production parallel now live, DTCC said it is working closely with its customers on a gradual expansion of the platform. Future enhancements may include additional DTC activities and capabilities as well as extending Project Ion to DTCC subsidiary National Securities Clearing Corporation (NSCC) to take advantage of NSCC’s Central Counterparty (CCP) trading guarantee for each cleared transaction.

“Project Ion provides a parallel ledger 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 choice and flexibility to customers. Those ready to leverage the Project Ion platform can begin development work today, while others can continue to use our classic solutions,” said Michele Hillery, General Manager of Equity Clearing and DTC Settlement Services at DTCC.