Watching closely will be a consortium of
banks which are expected to launch a so-called
utility settlement coin in late 2018.
allows parties to settle the purchase of securities
across borders without having to wait for the
traditional post-trade cash settlement and trade
The settlement coin (bit like an electronic cheque)
will sit on a distributed ledger backed by cash assets held at
central banks and convertible at parity with bank
deposits in major global currencies. It will also be
used solely within the interbanking market in
hopes of settling within seconds rather than days.
For this to work, only securities that reside on a
distributed ledger themselves can be settled with
the settlement coin.
The project was originally launched by UBS,
and now counts members including Deutsche
Bank, Banco Santander, HSBC, Barclays, and
Credit Suisse. Of course, it could be years before
clearing houses are fully removed from the
post-trade settlement process but the speed at
which it has become a possibility is itself telling of
The interest for the technology is also
making inroads in universities. Academic
institutions are already ofering courses in the
technology. In the US, Stanford will offer its first
comprehensive course on both cryptoassets and
distributed ledgers in 2018. Wharton and
Harvard Business School will unveil similar
courses this year.