SIX develops blockchain bond trading platform

New platform covers full bond trading lifecycle from issuance to settlement, although it is some way off market wide adoption.

SIX Securities Services has developed a blockchain powered service covering the full bond trading life cycle from issuance to settlement.

The prototype enables the issuing of bonds as smart contracts that specify at what dates coupon payments are made, for what amounts and when repayments occur.

The smart contract is connected to the chain where buyers can allocate money to the bond by paying in digitalised currency.

SIX Securities Services said the benefits of using blockchain technology include having one source of data stored on the ledger and significant cost reductions from the removal of operations and reconciliation processes. 

Thomas Zeeb, CEO at SIX Securities Services, explained despite the tool being some way off market wide adoption, “we are firmly of the belief that the potential shown here is promising – for us – and for the industry as a whole.”

“It also demonstrates our philosophy of focus and determination to research technological advancement with minimal disruption to our existing business models,” he added.

The new service follows news of the firm’s partnership with Digital Asset Holdings to develop blockchain proof of concept technology for Swiss technology.

The two firms are developing proof of concepts that will demonstrate the commercial viability of blockchain across the whole market infrastructure value chain.