The exchange is adjusting to new regulations that will take effect in January. The project seeks to eradicate manual processes and reduce operating costs.
The Colombian Stock Exchange (BVC) will use the so-called distributed ledger technology (DLT) or blockchain to register operations in its OTC derivatives market. The adoption is the product of an alliance between the financial institution and the fintech Framework Contract.
With the agreement, the exchange joins the Colibrí private blockchain consortium; this is an initiative that seeks to facilitate the exchange of collaterals in the OTC derivatives market, according to local Colombian media.
The adoption of distributed registries occurs before what will be the application of new regulations in the derivatives market in Colombia. The provisions will go into effect on January 1 of next year. The first tests for the OTC derivatives exchanges with Colibrí were executed in October 2019, according to a report released by the Framework Contract.
The evaluation consisted of an establishment that exchanges ownership of collateral with its counterpart using Colibrí, while the collateral always remains under the custody of a trusted entity.
“In a traditional settlement, the collateral is transferred between accounts. However, the operating model Colibrí allows its exchange through the registration of the property in a distributed, safe and resistant book, which works as a single trusted source about the ownership of the collateral ”, the fintech reported this on its website.
Only duly authorized participants can gain access to the records. Besides, thanks to the use of the new platform, the work times of the operations are expressed in seconds and not in hours.
The BVC’s interest in the use of blockchains appeared in October 2019. The institution convened startups with projects based on blockchains related to digital assets, smart contracts, document certification, digital signature, clearing and settlement of operations, administration of guarantees, transfers, and payments.
By: Jenson Nunez