Bank of Canada Okays Blockchain for Security Settlements

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The Bank of Canada marker is pictured in Ottawa on September 6, 2011. The Bank of Canada will release its latest monetary policy report this morning -- a document expected to explore the economic damage inflicted by falling oil prices. THE CANADIAN PRESS/Sean Kilpatrick

 

In what appears to be another step towards the recognition and adoption of blockchain tech, three companies have confirmed that blockchain can be used for automating securities settlements in real time; following a pilot blockchain test, dubbed “Project Jasper”.

The three companies, Bank of Canada, TMX Group, and Payments Canada affirmed that both cash and assets can be converted to tokens for instant exchange. CEO of Payments Canada, Gerry Gaetz, told Reuters:

“This shows that it is possible to deliver payments in a way that has never been done before – by directly swapping cash from buyers to sellers, resulting in instant settlements.”

However, there are still doubts as to the extent blockchain can be beneficial to banks and FIs, in terms of cost saving. The Senior Special Director of the Bank of Canada, Scott Hendry was quick to say:

“We’re still uncertain after doing this work that there are significant savings possible for participants. It’s not clear that all the participant dealers and banks are going to get a significant benefit out of this settlement system.”