ChainLink announced the completion of the second phase of its solution to tackle ineffectiveness in corporate actions. Twenty-four institutions have joined the tests, including ten financial market infrastructure such as DTCC, SWIFT and Euroclear alongside large banks and asset managers, such as BNP Paribas Securities Services, UBS and Schroders.
Business actions, such as dividends or share divisions, are extremely ineffective and very expensive. Citi noted that the average cost for the single event processing industry is $ 34 million, the DTCC estimating a total annual cost of $ 58 billion. We will return to the causes of these ineffectiveness. The ChainLink solution could potentially make a significant breach of costs by helping the standardization process, but it does not claim to solve each problem.
So how does the Chainlink solution approach these ineffectures? He says that he creates a “unified gold file” of corporate actions which is attested by market players. This can be used by smart contracts, guards or other post-exchange systems.
He uses AI to treat unstructured business action announcements and publishes them in a messaging format compliant with ISO 20022 structured. If the data is incomplete, certain institutions may be able to add data and to cryptographically attest to its precision. The system then saves the data on a blockchain and the messages are transmitted via Swift. Others can then consume these messages – including blockchain systems such as DTCC or others.
The article continues …
Do you want the full story? Pro subscribers obtain comprehensive articles, an exclusive analysis of industry and early access to legislative updates that keep you ahead of competition. Join the professionals who choose deeper information about the news at the surface.
Copyright image: Ledger Insights composite
