CLS, IBM to Trial DLT “App Store” Platform with Barclays, Citi

Tech giant IBM and CLS, a company that offers settlement, processing and data solutions in the foreign exchange market, have launched a proof of concept (PoC) test on LedgerConnect, partnering with a number of banks, including Barclays and Citi.

US-based CLS, a Forex settlement provider, and tech giant IBM announced on Monday a partnership to test the distributed ledger technology (DLT) platform LedgerConnect, which focuses on the financial services market, allowing banks and fintech companies initiate, share, and consume DLT-based services. The collaboration involves nine financial institutions, including Barclays and Citigroup.

During the trial, the participants will access LedgerConnect for services related to know-your-customer (KYC) procedures, collateral management, sanctions screening, derivatives post-trade processing and reconciliation, and market data. The platform will act as an app store and will host solutions provided by several selected vendors, including IBM itself, Baton Systems, Calypso, Copp Clark, MPhasis, SynSwap, OpenRisk, and Persistent Systems.

The proof of concept (PoC) will see banks accessing multiple solutions from a single platform, thus helping them to redirect their efforts from building applications to other business objectives. Financial companies are keen to implement blockchain, but it might be challenging for each entity to develop and run its own DLT system when similar applications are already operational. LedgerConnect hopes to help financial institutions save money and focus on value by offering its single platform that hosts multiple DLT solutions.

Alan Marquard, chief strategy and development officer at CLS, commented on the new platform:

“LedgerConnect is part of CLS's strategy to explore how we can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in the financial markets. We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks.”

The system is based on the Blockchain Platform provided by IBM Blockchain and Hyperledger Fabric technology. If the PoC succeeds and market demand and regulatory approval are achieved, IBM and CLS hope to make the platform widely available in the financial industry.

Marie Wieck, general manager of IBM Blockchain, said:

“Together IBM and CLS have been early pioneers in advancing blockchain solutions for the financial services space. Building on the success of CLSNet and leveraging the strong relationship CLS has with the world's leading financial institutions, LedgerConnect is uniquely positioned as a blockchain marketplace for the financial services industry, which will accelerate innovation across the ecosystem with value added services for blockchain networks.”

At the end of May, CLS invested $5 million in blockchain-oriented startup R3.