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.

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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.

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About Richard Kastelein

Founder and publisher of industry publication Blockchain News (EST 2015), a partner at ICO services collective Token.Agency ($750m+ and 90+ ICOs and STOs), director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of some two dozen Blockchain startups and has written over 1500 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat. Irish Tech News put him in the top 10 Token Architects in Europe.

Kastelein has an Ad Honorem - Honorary Ph.D. and is Chair Professor of Blockchain at China's first Blockchain University in Nanchang at the Jiangxi Ahead Institute of Software and Technology. In 2018 he was invited to and attended University of Oxford's Saïd Business School for Business Automation 4.0 programme.  Over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission's SME Instrument programme as a startup assessor and as a startup judge for the UK government's Innovate UK division.

Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London (5x), Manchester, Minsk, Nairobi, Nanchang, Prague, San Mateo, San Francisco, Santa Clara (2x), Shanghai, Singapore (3x), Tel Aviv, Utrecht, Venice, Visakhapatnam, Zwolle and Zurich.

He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He's written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com, and his work and ideas have been translated into Dutch, Greek, Polish, German and French. A journalist by trade, an entrepreneur and adventurer at heart, Kastelein's professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he's travelled for nearly 30 years as a Canadian expatriate living around the world. In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, 'The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he's raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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