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

Richard Kastelein is the Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News, co-founder and director at education company Blockchain Partners and partner of token design and ICO architecture company Cryptoassets Design Group.

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

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