Financial institutions have joined forces to develop a blockchain-based platform for the asset management industry in order to further digitise the sector and facilitate the distribution of funds.
The technology, hailed as “groundbreaking” in the evolution of funds distributed ledger technology, has been based on Ethereum – an open source, decentralised blockchain system used for cryptocurrency exchange, as well as other applications.
The platform – launched by Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange, and Natixis Investment Managers – enables the “reengineering” of the fund distribution value chain, from front to back offices and covering the “entire fund cycle”.
Robert Scharfe, chief executive of the Luxembourg Stock Exchange, said: “The launch of FundsDLT is an important step toward our shared goal of promoting the adoption of blockchain and digital assets across the financial industry.”
The decentralised blockchain technology platform should allow asset managers, distributors, asset servicers, and the entire supply chain to reduce costs by removing “redundant” activities. These include the removal of barriers for accessing investment strategies, Clearstream said.
FundsDLT also aims to provide the opportunity to achieve greater transparency for the end investor on the intricate workings of fund distribution.
Joseph Pinto, chief global operating officer of Natixis Investment Managers, said: “The digital transformation poses some of the greatest challenges and opportunities for the investment management industry today, and blockchain can play an important role.”
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