An entire firm fund transaction network will be migrated to blockchain in what is being described as the world’s first blockchain funds marketplace.
Calastone, a global fund transacting network has announced that its network of over 1,700 financial organisations will be migrated to blockchain in May 2019.
The migration to the company’s new Distributed Market Infrastructure is expected to reduce the cost and risk in the way which units in managed funds are brought, sold and reported.
Calastone’s chief innovation officer Campbell Brierley said the infrastructure would create a frictionless ecosystem which would eliminate risks.
“By making friction-free trading accessible to all parties in the value chain, we are creating an environment that marks an inflection point for the future of the funds sector, optimised to meet the needs of customers and investors now and in the long-term,” he said.
Mr Brierley said the service would allow organisations to innovate, stay competitive and offer new investment opportunities to the modern investor.
“Calastone’s DMI will totally transform the trading and servicing of funds and has the potential to realise significant long-term value,” he said.
Calastone expects the cost of fund distribution could be reduced by almost ₤3.4 billion a year with the company’s chief executive officer Julien Hammerson saying the move was an exciting step forward.
“The launch of our DMI marks an exciting step for the industry in accelerating the digitisation of the funds sector and is a significant achievement for Calastone. The migration of our global network is the culmination of years of hard work and continued investment in innovation,” he said.
Mr Hammerson said there were significant pressures on the industry to adapt and this infrastructure would enable that change.
“Funds remain a vital investment vehicle, though remain hampered by continually rising costs and threat of competition, ultimately rendering the current system economically and operationally unsustainable.
“Through leveraging blockchain technology, the DMI transforms the way in which funds are traded, enabling an investment management community that can meet the changing needs of investors,” he said.
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