Golden Copy: Wave of Distributed Ledger Technology

Early push to mine blockchain's foundation for data management gives way to realities

Cautious evaluation of types of distributed ledger technology, and determination of how it should be applied, have become prerequisites for any application to financial industry data operations

Last month, comments made by industry sources gave the impression that fragmentation inherent in the distributed ledger technology spawned by blockchain could make it difficult to apply the technology to reference data management.

The Depository Trust & Clearing Corporation (DTCC), as the de-facto industry utility for collecting records of transactions and their settlements, is the body that ought to or may have to make use of distributed ledger technology to improve on its recordkeeping and the accuracy of its data.

In March, Robert Palatnick, managing director and chief technology architect at DTCC, indicated that applying distributed ledger technology could help address reference data reconciliation, as well as mapping against counterparty reference data, and clearance and settlement utilities. He said he saw the possibility of providing value in this manner.

Palatnick gave an update on DTCC's distributed ledger technology stance this past week to sister site WatersTechnology. While he reiterated strong support for the idea that value can be derived from the technology for data management, Palatnick revealed that DTCC is cautiously examining a few different distributed ledger technology efforts, and waiting to see which one will prove steadiest or most fruitful.

Palatnick also warned against speculation about the potential for distributed ledger technology and said DTCC is still evaluating which applications of the technology for data operations will actually make sense.

This stance is quite in line with what Jeff Zoller, chair of financial industry operations group ISITC, also was saying back in March. So while there may have been a wave of enthusiasm for applying blockchain's underlying technology to the financial industry's data operations at the start of this year, that wave appears to have crested. The industry is starting to see the ocean of work stretching out to the horizon that must be traversed before distributed ledger technology can be integrated into its functions.

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