Payments Canada, the Bank of Canada and TMX Group Ltd. on Tuesday announced a new collaboration to experiment with an integrated securities and payment settlement platform based on distributed ledger technology (DLT), as part of the third phase of the Project Jasper research initiative.
Building on previous Jasper work, this phase of the project will develop a proof of concept for the clearing and settlement of securities using the central bank cash-on-ledger model. This platform would seek to discover greater speed and efficiency by automating the securities settlement process.
“It is vital to explore a financial ecosystem that leverages innovative technologies to optimize the business transaction process for all Canadian investors,” says John Lee, vice president, head of innovations and enterprise delivery, TMX Group, in a statement. “We believe industry collaboration among key stakeholders across Canada’s capital markets is critical to the success and long-term viability of this project.”
“A better settlement process would not only reduce the cost of securities transactions, but also support financial system resiliency, especially in periods of stress, through faster settlement times and reduced settlement risk,” adds Carolyn Wilkins, senior deputy governor, Bank of Canada.
The central bank and Payment Canada, along with several Canadian banks, launched the Project Jasper initiative in 2016 to examine the possible use of DLT, also known as blockchain. Until now, the project has focused on wholesale payments.
“This experiment continues to push boundaries, so it is exciting to move into a third phase with a broader scope and another partner,” says Gerry Gaetz, president and CEO of Payments Canada, in a statement. “We continue to learn by applying distributed ledger technology to a wider set of functions within our financial system.”
The process of selecting a vendor to support this latest phase of the project is underway, the organizations say, and that they expect to release the results of their experiment at an industry conference in in Toronto in May 2018.