Foreign exchange settlement giant CLS alongside IBM say they are testing a blockchain-based application system (app store) that will be used by at least 9 banks. The platform which is called LedgerConnect, will help financial institutions to utilize blockchain in the areas like customer compliance checks, know-your-customer processes and collateral management.
CLS and IBM hope to address the slow pace with which some in the financial sector are adopting blockchain. And with this solution, banks would no longer need to invest time and money into building their own solutions. A shared platform would mean that institutions could simply purchase applications build by various vendors all of whom would be vetted in accordance with security and technical standards.
As well as nine banking institutions that are already on board with the project, and are part of the proof of concept (PoC), several service vendors have already been taken on board. Company's say that once the platform has been tested, the platform will be opened up to the industry if there is demand.
WHY IS IT IMPORTANT?
1. CLS processes around $5 trillion in payments per day have set up LedgerConnect alongside IBM, Barclays and Citigroup banks as partners. Those companies are already partners in numerous fields.
2. IBM is becoming one of the top blockchain solutions developers. CNH industrials earlier signed an agreement to implement IBM’s blockchain solution. Earlier IBM has also begun cooperating on developing Stronghold USD stable coin, tied to U.S. dollar.