The BaNCS Network is a private permissioned blockchain ecosystem through which the TCS BaNCS customers across banking, market infrastructure, custody and insurance domains, can collaborate by seamlessly connecting to a single ledger and accessing information and services on a real-time basis. This can open up access to new markets, services and business lines across geographical boundaries. In tests run by the two CSDs, a set of equities and fixed income securities from both the Kuwaiti and Moroccan markets were created on the BaNCS Network implemented on Quartz Blockchain, along with segregated accounts to hold these securities.
The associated notifications on the status of transactions were published on the BaNCS Network and instantaneously made available to the respective CSDs. These transactions were settled using cash coins held in the Quartz Blockchain in a true delivery versus payment DVP settlement model.
Along with managing and implementing the post trade market transformation plans, we explored blockchain technology in order to introduce new services and operational efficiencies in the financial market. We are pleased to see our TCS BaNCS customers, Maroclear and Kuwait Clearing Company, leverage this capability, vindicating our commitment to provide sustained long-term value and innovation to our customers.
Real-time cross-border settlement with cash coins reduces risks, costs and has the potential to create enhanced liquidity in markets in Middle East and Africa. Cash coins are a form of digital currency pegged to a fiat currency at a fixed market rate and are maintained on a private, permissioned blockchain network. Cash coins in a blockchain network enable seamless and real-time DVP settlement of cross-border securities transactions.
Instantaneous settlement significantly reduces the currency risk associated with such transactions at present, arising out of exchange rate fluctuations during the time it takes to settle. This settlement model has the potential to significantly reduce liquidity requirements for participants, while also decreasing settlement risks.
