US Financial Giant State Street Tests Blockchain System

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American financial services giant State Street has tested a Blockchain system that it hopes can be used to streamline the securities lending process as the financial industry accelerates efforts to adopt the emerging technology.

The software, which was tested this year over the course of seven months, could be chosen as one of the company’s Blockchain projects to be implemented in 2017, Hu Liang, senior managing director of the Emerging Technologies Center at State Street told reporter Anna Irrera in a report at Reuters.

“The aim is to enhance the operational aspect of securities lending,” Liang said. “In a lot of cases there is no automated linkage to say which account it (the collateral) should go back to.” The system would reduce manual intervention involved with the process, make it faster, and create a better record for regulatory reporting purposes, Liang said. 

The report went on to note that the Blockchain system that it tested could transform the collateral posted by an investor to borrow securities from State Street’s clients into a digital token that could be used for other transactions and that this could create a digital, immutable record of how the collateral had been used and would make it easier and quicker for State Street to return the collateral to the borrower’s account once their lending position had been unwound.

“The aim is to enhance the operational aspect of securities lending,” Liang said. “In a lot of cases there is no automated linkage to say which account it (the collateral) should go back to.” The system would reduce manual intervention involved with the process, make it faster, and create a better record for regulatory reporting purposes, Liang said.

State Street Corporation is an American worldwide financial services holding company founded in 1792 and is the second oldest financial institution in the United States of America. The company’s headquarters are at One Lincoln Street in Boston and it has offices in 29 countries around the world. State Street is organized into three main divisions.

The Global Services business is a custodian bank with $28 trillion (USD) of assets under custody and administration. The Global Advisors business provides investment management services and has $2.45 trillion (USD) of assets under management and the Global Markets business offers investment research and trading services to institutional investors.

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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