Investment management giant Vanguard announced Thursday that it had finished the initial phase of an ongoing pilot focused on the digitization of asset-backed securities, a project undertaken in conjunction with blockchain startup Symbiont.
The firms said in a press statement that the initiative "successfully modeled the full lifecycle of an ABS settlement on distributed ledger technology (DLT) network by replicating end-to-end transaction flows."
"By digitizing and streamlining the ABS issuance process, we will be able to increase the speed and transparency of transactions while reducing costs and minimizing exposure to risk, which ultimately leads to a more efficient business model for future generations of capital market activity," Warren Pennington, principal and head of Vanguard's Investment Management FinTech Strategies Group, was quoted as saying.
Participants included Citi, BNY Mellon, State Street and an unnamed "large US ABS issuer."
As previously reported, Vanguard and Symbiont have partnered on a number of related initiatives, including the automation of index data tracking and a blockchain test focused on FX trading. The companies first began working together in 2017.
"The successful demonstration of an ABS issuance is a momentous step forward in fundamentally changing capital markets infrastructure through blockchain technology," Symbiont CEO Mark Smith said Thursday.