Digital Asset Holdings, a developer of distributed ledger technolgy, and the Depository Trust & Clearing Corporation (DTCC) today announced plans to develop and test a distributed ledger based solution to manage the clearing and settlement of U.S. Treasury, Agency, and Agency Mortgage-Backed repurchase agreement (repo) transactions.
Repo agreements were selected for this proof of concept because there is an opportunity to streamline how these products are cleared, as repo transaction volumes continue to grow.
Repo trades often occur in real time, with the settlement, clearing and netting processes happening in multiple steps. While DTCC’s Fixed Income Clearing Corporation (FICC) provides the matching and verification of the initial “start leg” of the repo, FICC does not currently settle the start leg of same-day starting trades. As a result, the settlement of a same-day repo start leg may occur in real-time outside of FICC.