Canadian banks, TMX, use open source blockchain pilot to process security settlements instantly

An ongoing pilot project is continuing to transform the Canadian financial infrastructure, and recently, proved that blockchain can instantly settle both cash and security settlements.

The Bank of Canada, Payments Canada, TMX Group and Accenture began tinkering with distributed ledger technology (DLT) in 2015 after the launch of Project Jasper. The goal was to better understand how blockchain and other distributed ledger technologies could change the way payments were performed between parties in Canada.

After three experimental phases to date, Jasper 3, the latest proof of concept spearheaded by Accenture, was presented recently at the Payments Canada Summit in Toronto along with its findings.

While details are scarce – a full report is slated for release with more findings later this summer – Phase 3 is currently the only proof of concept that maintains privacy for market participants and their transactions by giving only the parties involved in a specific transaction on a ledger the ability to view transaction history, according to John Velissarious, Accenture’s blockchain technology and security lead told ITWC.

“The work itself was a proof of concept to demonstrate putting both assets and cash on a ledger, which is somewhat different than anything else that’s been done before,” said Velissarious. “Other projects of a similar nature focused on just equity or other types of assets, or exclusively on cash. This project combines the two, and demonstrated the feasibility for doing post-trade settlements on a ledger.”

Phase 3 is built on R3’s Corda DLT platform. Velissarious said Corda allows parties performing node to node transactions to not broadcast their transactions to others on the network. This function is extremely important for financial services, and difficult to achieve with other DLT platforms.

“Other DLTs use different forms of privacy called channels. Functionally, they achieve the same level of confidentiality, but it poses a challenge when it comes to scaling. When you have two parties on the network, you have to create an encrypted channel between the two. If there are 10, you have to create 10 channels,” explained Velissarious. “Corda is designed by banks for banks. Corda can be used in other environments, but a significant part of its membership is from the financial services.”

While the latest phase in the Jasper pilot didn’t impact the end customer, it does set the stage for a much smoother banking experience, suggested Velissarious.

“As you can imagine, the implications of the technology in general is really around speed of execution and being able to provide other types of settlement processes that could lead to end users being positively impacted by better performance,” he said.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Alex Coop
Alex Coop
Former Editorial Director for IT World Canada and its sister publications.

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now