DTCC unveils digital collateral management platform

The Depository Trust & Clearing Corporation (DTCC) has announced a digital collateral management platform that will be demonstrated through a live event on 23 April.

This marks the first industry demonstration developed on DTCC's digital ecosystem, launched last October, known as DTCC Digital Launchpad. The platform, an AppChain-based system, is designed to support institutional decentralised finance (DeFi) and will showcase its capabilities representing a diverse array of financial market assets and participants.

Collateral is widely recognised as a vital risk mitigation tool, providing critical support for financial stability. With the increasing complexity of markets and rising cost pressures, demand for high-quality collateral is on the rise. The utilisation of blockchains offers a promising opportunity to enhance the efficiency of collateral flow across what are currently siloed infrastructures, potentially unlocking significant capital and operational efficiencies.

The AppChain-based platform aims to increase the mobility and velocity of collateral movements globally, enhance capital efficiencies and liquidity for all stakeholders, and enable the convergence of traditional and digital assets. It will also support the establishment of an open digital liquidity ecosystem that allows market participants to deploy digital applications that improve collateral operations.

This application is built on the DTCC AppChain, which uses the LF Decentralised Trust's Besu blockchain and DTCC ComposerX. The AppChain provides enhanced control over privacy, security, and data while offering a scalable, industry-driven framework rooted in open architecture and common standards.

"Our goal is to highlight how we can enable real-world, institutional-grade digital collateral market infrastructure," stated Nadine Chakar, Global Head of DTCC Digital Assets. "This platform is unique in that we've created something that's more open, flexible, dynamic, and comprehensive than any previous digital collateral initiative."

Chakar further added, "Our work does not stop today. We plan to continue building on this collateral model, engaging with the industry and our regulators to develop the standard for tokenised collateral across global jurisdictions, working with the buy-side to give them more direct market access, and laying out the regulatory and legal path to implementation."

Dan Doney, Chief Technology Officer of DTCC Digital Assets, noted, "Collateral mobility is the 'killer app' for institutional use of blockchain – we've pulled together a coalition of technologists and market participants to successfully showcase how the speed and openness of this technology can safely and reliably unlock liquidity in traditional markets at scale."

He further explained, "By using smart contracts to automate the full range of collateral operations, we enable complex trade execution across markets in real-time at any time, even in volatile conditions."