Currently, Project Ion uses distributed ledger technology to conduct over 100,000 stock transactions on average each day.
According to a press release issued on Monday, The Depository Trust & Clearing Corp. (DTCC), a New York-based provider of post-trade financial services that handles all transactions on the American stock market, has started a private blockchain project aimed at helping clients settle trades more quickly. The DTCC supports the entire public securities market in the United States and serves as the counterparty for the majority of deals.
In September of 2020, Project Ion transitioned from being a pilot program to a development program. According to DTCC, it is currently processing almost 160,000 bilateral equity transactions on busy days and an average of over 100,000 per day in a parallel processing environment. The Depository Trust Company, a division of DTCC, continues to be the definitive source for transactions.
By utilizing blockchain technology, Project Ion is intended to allow T+0, or end-of-day, settlement cycles. Although the Securities and Exchange Commission (SEC) advocated accelerating this in February in response to highly volatility meme stock trading, stock market deals now take two days to settle.
Vlad Tenev, CEO of Robinhood (HOOD), said that the T+0 settlement will stop turbulent markets like those experienced by GameStop (GME) and AMC last year (AMC).
For customers eager to use blockchain technology for quicker settlement, Project Ion will be introduced in addition to DTCC’s current settlement option.
With the former president of the New York Stock Exchange stating that “blockchain technology is going to rewire all financial services,” as quoted in the Wall Street Journal on Monday, several top traditional finance companies, including Goldman Sachs (GS) and JPMorgan (JPM), are dipping their toes into the blockchain industry.
Contrary to many traditional blockchain networks like Bitcoin and Ethereum, DTCC’s technology is private and permissioned. It is being developed in partnership with companies including Barclays (BCS), BNY Mellon (BK), Charles Schwab (SCHW), Citadel Securities, Citi (C), and Credit Suisse (CS).
Additionally, R3 and DTCC have teamed together to establish Project Ion, which makes use of R3’s Corda distributed ledger technology (DLT) platform.
