Bank of Montreal Tests Blockchain Debt Issuance
According to reports, the Bank of Montreal has undergone yet another test of blockchain-tech in regards to markets with fixed income as part of a collaborative effort with the Ontario Teacher’s Pension Plan. Additionally, the most recent test was related to the transition of a debt in Canadian dollars through a blockchain. The bank then transferred $250M Canadian dollars in one-year floating deposit notes to the teacher's fund and utilized blockchain-tech to monitor the entire transition.
The settlement system designed on the back of blockchain tech and created by BMO capital markets was utilized to conduct the transfer as the main objective is to enable issuers and customers more transparency to monitor transactions on the blockchain.
Global trading executive, Kelsey Gunderson of BMO, expressed her joy in regards to the latest test and stated that it was a vital initial step toward developing and launching a complete and operational blockchain solution that BMO believes will enable securities trading, both primarily and secondarily. Additionally, apart from acquiring the first fixed-income Canadian dollar situation, the BoM is hoping that widespread adoption of the new system will eventually shave off several expenses in sections including hard cash transaction settlement, compliance and more.
Should blockchain-tech carry out a vital role in regards to the upcoming capital markets is what everyone is asking since the bank’s test is not the first one to be conducted. During June of last year, an international German company, Daimler AG, distributed utilizing blockchain-tech to issue the first security as part of a $79M deal.
Additionally, at the beginning of this year, several financial giants including Wells Fargo and Bancorp successfully conducted their own tests on blockchain tech as a means of standardizing the significant amounts of data acquired from home loans deemed as securities. This way to provide increased transparency. In more recent news, earlier this year during April, Canada’s national bank was successful in utilizing a blockchain app from JP Morgan to copy a $150M transfer of deposit notes.