Slide 1

Shrewd Markets & Smart Settlement On Blockchains?



Tuesday, 24 May 2016


Professor Michael MainelliZ/Yen Group. Download Michael Mainelli's presentation here.

Richard Olsen, Lykke Corporation. Download Richard Olsen's presentation here



Z/Yen Group Limited

90 Basinghall Street, London EC2V 5AY






There is considerable interest in the potential use of ‘blockchain’ in the settlement of securities transactions.  Proponents argue that the use of cryptographic security tools to create blockchains (sequential, digitally signed and validated records of ownership) can allow almost instantaneous post-trade delivery against payment (DVP), thus radically simplifying post-trade processing and substantially reducing both costs and operational and liquidity risks.  Three assertions are oftenmade.  First, that decentralisation can be achieved through other schemes more efficient than 'bitcoin mining'.  Second, that decentralisation will lead to substantial shifts in the functions and organisation of the post-trade landscape. Third, that the adoption of blockchain in securities settlement will require a co-ordinated and widespread change in operational processes, and will not be achievable through piecemeal efforts

This seminar will explore two particularly interesting initiatives.  Lykke uses blockchain technology to build a global marketplace for all asset classes and instruments with immediate settlement and second by second interest rate payments. The new marketplace is completely open source and uses a matching engine based on price-spread-time priority, not just price-time as is typical for established exchanges. Richard Olsen will explain how banks and other institutions can leverage the new marketplace and its technology for their own businesses.  SETL is a permissioned ledger system that aims to be as palatable to top-tier banks as possible, with a view to moving cash and assets immediately and achieving settlement finality of transactions.