State Street Digital Completes Pilot for Same Day Settlement Using Blockchain

Nadine Chakar, head of State Street Digital, said the firm had taken “the first step on the moon” by successfully completing a pilot of same day settlement using blockchain infrastructure, according to a story in MarketsMedia news. State Street and regulated blockchain infrastructure platform Paxos completed a pilot of same day (T+0) settlement. As part of the pilot State Street simulated settlement and custody of shares on the Paxos platform and asset movements with Credit Suisse. The pilot was performed using State Street’s Alpha platform with ties it’s Charles River trading platform to the middle office and back office. State Street used Paxos Settlement Service, a private, permissioned blockchain to send settlement instructions to Paxos for settlement while still delivering the required messaging to interface with existing settlement systems. Atomic settlement on a blockchain is the instant exchange of two assets that are linked, so that the transfer of one only occurs upon the transfer of the other. Paxos technology allows for continuous netting and settlement which reduces cost and capital commitments and also uses a safe, efficient and transparent margin calculation so there are no surprises for market participants.