Calastone is a London based global funds network, and it’s made the huge move to start using blockchain technology. It will use blockchain and distributed ledger technology (DLT) to transmit and communicate billions of messages every month that help keep its $217 billion worth of assets under management flowing. Blockchain and DLT will speed up this messaging process, meaning buy and sell orders can be processed faster in order to mitigate risk.
Calastone processes transactions for some of the biggest names in finance globally, including Invesco, Schroders, and J.P. Morgan Asset Management, making this move to blockchain technology a huge leap for the whole industry.
Huge Cost Savings
By switching to blockchain technology, Calastone believes it could save clients up to $4.3 billion annually. Currently, that money is lost due to market movements and fees for the order processing system. Blockchain and DLT – with the help of smart contracts – can fully automate the entire process and shave off valuable seconds from the entire process. This means that not only will investing in funds become less expensive, it means that portfolios will grow at a faster rate due to smaller management fees.
Bonds on Blockchain
Calastone can rest easy knowing that this technology has already been field tested and is performing well. Over in Australia, the Kangaroo Bond was issued back in August and solely uses blockchain and DLT for its many processes. It has been a raging success in the country, and it’s inspiring other traditional financial services firms to jump onboard the blockchain revolution.
Banks Joining in
When it comes to banking partners, Calastone doesn’t need to worry about banks avoiding it. Bank of America has applied for more blockchain technology patents than any other firm in the world – including IBM. This highlights the demand for this new technology and its potential to help drive the traditional financial system forwards. With every passing day, more banks and traditional financial services firms are warming up to the idea of blockchain technology, along with how it can be integrated to improve the current system rather than replacing it.
Calastone is currently undergoing the final stages of development and testing of its new blockchain and DLT platform. We can expect to see it go live in early 2019, with trillions of dollars flowing through the system by this time next year. Calastone is taking the first step in bringing blockchain to the global financial markets, and other fund network providers are likely to follow suit.