Highlights
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- Vanguard has successfully completed its blockchain pilot trialing
- The later phases of blockchain pilot would merge into ABS issuance and settlement process
- Pilot is forging an efficient business model for the upcoming generation
Vanguard’s Blockchain Pilot Trailing
Vanguard is the 2nd biggest index fund manager across the world. Vanguard has declared that it has completed the 1st phase of blockchain pilot trailing successfully. This blockchain pilot trailing is basically the digitization of the ABS (asset-backed securities).
The pilot sees the Vanguard associate with a larger US-based asset-backed securities provider, distributed ledger tech provider Symbiont, and the financial institutions named BNY Mellon and Citi. The purpose is to model the entire life cycle of the securities settlement by using the ledger technology network.
Both Vanguard and Symbiont imagined that later phases of the blockchain pilot would merge into ABS issuance as well as the settlement process. Thus it would offer an improved information flow, increased price discovery, and market liquidity. In addition to this, it would also offer an automated execution of the key corporate actions.
Digitizing Securities by DLT
Warren Pennington is the head of the Investment Management FinTech Strategies Team of Vanguard. Warren described that the pilot was like forging an efficient business model for the upcoming generations.
He said that by streamlining and digitizing the ABS issuance procedure, they could increase the transparency and speed of transaction processes by decreasing the costs.
Mark Smith is the chief executive of the Symbiont. He described the competition of this program as an excellent step to change the infrastructure of the capital market. Mark added that they could do it via blockchain technology. He said that 2020 might be the year when for the first time. The market participants would notice an active ledger-based issuance.
Vanguard made its first partnership with the Symbiont. The partnership was built in late 2017. Vanguard unveiled an initiative to influence the blockchain technology to enhance price index data allocation.