A memorandum of understanding signed today sees Russia’s National Settlement Depository (NSD) and the China Securities Depository and Clearing Corporation Limited (CDSC) – both their respective countries’ central securities depositories – partner to develop blockchain applications in the post-trade space.
The partnership was announced today by the NSD, which has also engaged in a similar endeavor to develop blockchain solutions with the central securities depository of South Africa, in September this year.
At the time, chairman of the NSD executive board Eddie Astanin was bullish on seeing the post-trade industry as the first avenue for blockchain-based disruption. While cryptocurrency enthusiasts will rightly point to blockchain’s proven use-cases with the likes of bitcoin, Astanin stated:
I think that post-trading may become the starting point of transition of the distributed ledger technology and blockchain from theory to practice.
The new collaboration has seen the two CSDs agree “to exchange experience and information” broadly while cooperating in settlement operations, information services and other facets of the post-trade industry.
Astanin underlined the importance of Asian markets for Russia’s integration of its post-trade infrastructure in the global financial ecosystem. He further revealed that the Bank of Russia and the People’s Bank of China – the countries’ central banks – will also facilitate users from the countries to gain “mutual access” to each other’s markets.
Cooperation in the Fintech sphere will become an important element in our cooperation with CSDC. In particular, we agreed to coordinate our effort aimed at researching the opportunities for using the blockchain technology in the post trade sector.
Earlier this year, the NDS began testing blockchain solutions for a corporate e-proxy voting system, based on the NXT platform. A working prototype was developed before testing commenced over a four-month period which saw submission speeds of 80 voting instructions per second.
Similar efforts to leverage blockchain technology for e-voting applications have borne fruit. The most recent example is that of the Abu Dhabi Securities Exchange, which announced that it had already employed a blockchain-based platform wherein shareholders will be able to register votes relevant for annual general meetings by simply using a smartphone.