TMX Group Ltd (TSE:X), Central Bank of Canada and other nonprofit organization payments in Canada have tested the feasibility of using block chain technology for instant securities settlements.
The integrated securities and payment settlement platform is developed by the three organizations with the help of the distributed ledger. The same technology favors using crypto currencies such as Bitcoin (BTC) and tokenizing the cash and assets for instant settlement.
Chief Executive Officer and President of Payments Canada, Gerry Gaetz said the conducted test run shows that instant settlement of transactions is possible by swapping the cash between sellers and buyers.
Mr. Scott Hendry, Senior Special Director of Bank of Canada while speaking at the Toronto Payment conference said it will take time to ascertain the cost savings through the use of block chain technologies for settling the securities transactions.
He is not yet clear how much savings the new technology will offer for the participants. It is yet to be ascertained what percentage of savings the banks and the participating dealers will achieve with this innovative and much touted secured technology in settling the transactions.
The TMX Payments Canada, and the Bank of Canada have conducted the final phase of the tests in 2017 under the new initiative known as Project Jasper.
Jasper is the collective effort of a number of financial institutions worldwide to find innovative ways for using the more secured distributed ledger technology to increase transparency, efficiency as well as the security for the financial transactions.
Many other institutions are also experimenting with other technologies to facilitate instant settlements. According to the latest news, the Central bank in Europe staged a decision to introduce an innovative system in November 2018 to facilitate real time settlement of transactions. However, the Central Bank will not use the distributed ledger technology for this new initiative.
The new payment system allows transfer of funds in real time, 24 hours a day and without any interruption throughout the year. It facilitates cross border transactions with ease and in real time.