CLS, a foreign exchange settlement provider and IBM have partnered with nine other commercial banks to launch a platform that will allow them access blockchain applications. Dubbed LedgerConnect, the platform will be used to access services and applications offered by vendors in areas like collateral management, sanctions screening and customer compliance checks.
Making it easy to use blockchain
The mission behind the platform is to simplify and make it cheaper for financial firms to use blockchain technology. The platform has a model and design similar to that of consumer app store. CLS is a trusted and well-established bank utility which offers a safe place Hyperledger Fabric-blockchain.
Functions of the platform
LedgerConnect will enable commercial banks to sell and buy side companies. It will also enable software vendors and FinTech companies to deploy, share as well as use services that are hosted on the blockchain network.
Blockchain was first used to underpin digital currency bitcoin. It is a public ledger of transaction which is maintained by computers connected together in a network. The distributed ledger gets rid of the need for a centralized authority. Many banks and financial institutions around the world have put a lot of money in the development of blockchain, which many believe will help in cutting costs and improving efficiency.
There have been many blockchain-based applications that have been tested banks and other financial institutions. However, very few of these applications have managed to go into full production as many have remained prototypes on paper. The banks have taken a united approach so as to reduce time and cost that would be spent if each bank was to develop individually.
To further boost security and increase transparency, there is need to vet all applications as well as developers. This vetting is made possible by a shared platform, which is run by an existing market structure provider. This will ensure that all apps meet the required security standards required by financial institutions.
CLS handles more than $5 trillion transactions every day on behalf of its members. The company has clients from the some of the largest financial institutions around the world.