UBS is pushing ahead with its blockchain activities. A new DLR solution is expected to help save costs in its repo business.
UBS has successfully implemented a repo solution from US financial services provider Broadridge Financial Solutions based on the Distributed Ledger Repo (DLR) platform, according to a media release Monday. It's an important step in providing clients with significant settlement cost savings, operational simplification, scalability, and operational risk reduction through the use of distributed ledger technology and smart contracts.
«By digitizing our existing sponsored repo trade flow and incorporating those trade flows into our DLR tech stack on Broadridge's platform, we can increase efficiencies while reducing the risk of fails and lowering our settlement costs,» said Christian Rasmussen, head of investment and execution, group treasury, UBS.
The global expansion of the DLR platform to include sell-side and buy-side firms enables a network effect with increased value and additional transaction types, according to the statement. Broadridge has emerged as a leader in distributed ledger capabilities to transform the $1 trillion per month global repo market.
Strongly Committed
In early April, UBS completed its first cross-border intraday repo transaction with a global Asian bank using the US firm's DLR platform. The transaction is seen as an important step toward more efficient intraday liquidity management. One of the main advantages of DLR is greater flexibility in settlement timing.
In general, UBS is betting heavily on blockchain. In November last year, it issued the largest blockchain bond to date on the SIX Digital Exchange (SDX), among others, in the amount of 375 million Swiss francs ($410 million) with a dual listing on the SIX. The entire issue was settled on the blockchain.
UBS, like Credit Suisse which it has since acquired, is one of the founding shareholders of Fnality International, a UK-based financial technology company launched in 2019 by an international consortium of banks. Fnality offers blockchain-based payment methods for the future.
