The Depository Trust & Clearing Corporation (DTCC), a post-trade market infrastructure provider for the financial services industry, announced the results of a benchmark study on Wednesday which demonstrated for the first time ever that distributed ledger technology (DLT) is capable of supporting average daily trading volumes in the US equity market of more than 100 million trades per day.
For those of you not in the know, DLT is a synonym for blockchain. It is being used more and more in corp-speak as a means of re-branding away from blockchain, which people are starting to have their doubts about, and to make the technology sound fancier and more interesting than it actually is.
The study, which was conducted by Accenture with additional support provided by technology service providers Digital Asset (DA) and R3, proved that DLT can perform at levels necessary to process an entire trading day’s volume at peak rates, which equates to 115,000,000 daily trades, or 6,300 trades per second for five continuous hours.
Currently, public blockchains supporting cryptocurrencies operate at single or double digit per second performance, which until now was the only indication of the potential volume that DLT might be able to support.
DTCC did note that the study will act more as a starting point for further testing as it only tested basic functionality. As such, more tests will need to be done to see if DLT can meet the resiliency, security, operational needs and regulatory requirements of its existing clearance and settlement system.
“We are excited to lead this important work to advance the performance capabilities of DLT and help create new possibilities for leveraging the technology more broadly across financial markets,” said Murray Pozmanter, Head of Clearing Agency Services at DTCC. “As an early adopter of DLT, we are encouraged by the results of the study because they prove that the technology’s performance can scale to meet the needs of markets of different sizes and maturity.”