Strate and National Securities Depository, the Central Securities Depositories (CSDs) of South Africa and Russia respectively have partnered to develop solutions utilizing distributed ledger technologies (DLT).
The two CSDs have signed a Letter of Intent at the Sibos event in Geneva in September 2016. They believe that through industry-wide collaboration, CSDs will be better positioned to face the changes presented by DLT technology and develop innovative solutions for the benefit of the financial market.
"It is an important time for CSDs to be working together to define the future landscape in the DLT environment. Strate looks forward to developing this long-standing and valuable relationship with NSD to develop solutions for emerging market CSDs”, Monica Singer, CEO of Strate, said.
According to the official release, the first use case will focus on proxy voting. Under the partnership, both the entities will explore opportunities for mutual cooperation in the post-trade settlement arena including information sharing regarding standards, regulations and DLT technologies; the exploration of solutions that are of mutual benefit to both CSDs; and potential cost savings through the sharing of technology and development costs.
“We believe that the securities settlement and custody industry is one of the promising sectors where we can use new technologies. I think that post-trading may become the starting point of transition of the distributed ledger technology and blockchain from theory to practice”, Eddie Astanin, chairman of the executive board, NSD, said.
Astanin added that NSD started research in this area last year and initiated new developments. In April 2016, NSD was one of the first financial organizations in the world that announced the development of a blockchain-based prototype of e-proxy voting.
A number of other CSDs have expressed interest in joining the partnership and Strate and NSD have welcomed these discussions.
