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U.S. blockchain, securitization industry groups join forces

By Anna Irrera
The Wall Street sign is seen outside the New York Stock Exchange, March 26, 2009. REUTERS/Chip East (Reuters)

By Anna Irrera

NEW YORK (Reuters) - The lobby group for Wall Street's structured finance companies has partnered with the trade association for the blockchain industry to explore ways blockchain technology can streamline the $1.9 trillion U.S. securitization market.

The partnership, set to be announced on Monday, will see the Chamber of Digital Commerce and the Structured Finance Industry Group work together on research and other projects, the groups said.

The effort kicked off with the publication of a study looking at how distributed ledger technology can be deployed to simplify the securitization market, which despite its size, remains highly manual and opaque.

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According to the study by Deloitte, blockchain could help increase the certainty of securitization transactions and improve market transparency, which in turn would lead to better liquidity.

Blockchain is an immutable shared ledger of transactions that is maintained by a network of computers, rather than a centralized authority. As it creates a shared golden source of data, it can reduce errors and the need for reconciliation.

Financial institutions have been ramping up their investments in blockchain in the hopes that it can help make some of their processes more efficient and cheaper to manage.

(Reporting by Anna Irrera; Editing by Cynthia Osterman)