Wall Street is finally ready to bet big on blockchain technology. Many of the world’s largest banks have already moved a sizable segment of their financial infrastructure onto blockchains, and now Wall Street is following suit, according to Monday’s announcement by the Depository Trust and Clearing Corporation (DTCC), which serves as the backend for a significant portion of Wall Street trading.
The DTCC said that it’s replacing one of its central databases with a distributed ledger similar to Bitcoin’s blockchain. This ledger will be powered by IBM together with financial blockchain startups Axoni and R3. It will allow multiple financial institutions to view and update transactions at the same time. The DTCC aims to have it fully functional by early 2018.
Blockchain has been deemed attractive not because of the digital tokens that use it, which are often volatile, but because of the technology’s decentralized nature. A blockchain serves as a global financial ledger that records all transactions and is maintained and updated by thousands of computers acting as a network from all over the world. This structure allows for faster and more secure transactions.
“This is a real tangible step into what could be a very different future for Wall Street,” said DTCC chief executive Michael C. Bodson in an interview with the New York Times. This decision by one of the world’s financial centers to transition to blockchain is a true testament to the perceived value of the technology.