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Calastone, the operator of a London-based investment network for investment funds, is trying to move the entire settlement system to a blockchain by May 2019.
According to a Sunday Financial Times report, Calastone, which provides services to over 1,700 companies including JP Morgan Asset Management, estimates the plan could help the industry save up to £ 3.4 billion (or 4, 3 billion dollars) in the costs of distributing the funds, excluding the United States market.
Currently, Calastone's liquidation processes are still manual, including over 9 million messages and transactions worth approximately $ 217 billion per month between buyers, sellers and distributors, according to the company's website. Now it is examining the blockchain as a way to automate these processes in order to make them cheaper and more efficient as the parties involved will no longer have to send the same information multiple times.
In June 2017, Calastone successfully supported it completed the first phase of a proof-of-concept blockchain for "distributed market infrastructure", and said at the time that it would move its system to a private blockchain network authorized in 2019.
"A blockchain-enabled market means relieving operational inefficiencies, increasing performance and generating more savings: a win-win solution," Calastone deputy CEO Ken Tregidgo said at the time.
Back in February, Calastone expected the move to the blockchain could help the global mutual fund market save over $ 2.5 billion annually, using data from a 2016 Deloitte study.
Other actors in the asset management sector are also trying to bring mutual fund transactions onto blockchain platforms. Already in 2016, five major UK mutual fund managers, including Aberdeen Asset Management and Aviva Investors, collaborated on the exploration of blockchain in trading systems to reduce costs.
Last year in December, the United States fund manager Vanguard He said will soon start using smart contracts in some of its commercial operations. Also Nasdaq and the Swedish bank SEB tested blockchain for the trading of mutual funds in September 2017.
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