Santiago Stock Exchange Plans IBM Blockchain Implementation

The Santiago Stock Exchange has today announced plans that would see it implementing a blockchain-based solution on IBM’s protocols, in a landmark move for the technology.

Chile’s primary securities exchange, the organization is working in collaboration with IBM on an implementation of the technology, following successful trials, which could go live over the next three years.

The move would become easily the biggest implementation of its kind in the history of distributed ledger technology, and would see the third-largest stock exchange in South America run a lending program via the blockchain.

The tool could also be implemented in functions across the global financial ecosystem, and is regarded by some analysts as an important milestone in the digitalization of finance and securities exchange worldwide.

According to IBM projections, the implementation will shave 40 percent of the administration costs while smoothing the process of information exchange throughout the chain of investment.

But Santiago Stock Exchange CIO Andres Araya was keen to point out that the technology deals only with back-office processes, rather than processing trades directly.

"We spend two to three days after trading signing contracts, adding the assets, and the intermediary needs to create the collateral. All of that will now be put in a block that will be queried by different intermediaries."

Analysts have suggested that the banking and finance sectors could be among the most significant beneficiaries of blockchain technology, saving significant amounts of time and resources while improving accuracy, processing speed and security.

The IBM collaboration represents one of the first projects of its kind to get the green light backing for execution, and will be watched by industry stakeholders around the world when the systems transfer over to the live private blockchain at the point of launch.

The platform will be developed on IBM’s Fabric protocol, one of the most prominent distributed ledger frameworks to emerge so far from the open-source Hyperledger project.

Highlighting the benefits the project would bring to the Santiago Stock Exchange, IBM vice-president Jerry Cuomo said the development would benefit from more commercial partners, in the spirit of consortium development that surrounds the technology.

“This is about taking it to the next level and starting to bring more of a consortium around the project."