As of recently, three major institutions have joined forces to create a new private ecosystem based on blockchain. We are talking about the major software giant IBM and the major banks such as Barclays and Citigroup which are acting as the founders of LedgerConnect.
Basically, LedgerConnect will be a financial blockchain “app store” that will make it easier for banks to access distributed ledger technology (DLT) solutions from fintech and software providers. This will be done in turn to reach more bank customers.
The blockchain-based app store (LedgerConnect) is the offspring of the bank-owned currency trading utility CLS and the enterprise software giant IBM. However, it is precisely nine companies that are joining the proof of concept (PoC) and the ones which have selected services from a number of vendors such as Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRisk, SynSwap and Persistent Systems.
What’s most important is that LedgerConnect will allow financial institutions to access DLT-based services in areas such as know-your-customer processes, collateral management, sanctions screening and derivatives post-trade processing.
The new hub will also address a connectivity gap which will face large tech firms and fintech organizations with the cost and complexity of maintaining their own distributed networks. This is why banks will be able to consume their various applications.
According to the vice president of financial markets at IBM, Keith Bear:
“Having a secure network and proven infrastructure allows an app store kind of model, where banks can identify applications from certified fintech and software providers and deploy these apps over a seamless blockchain network,”
There are several different deployment options to consider when designing these distributed ledgers for live environments, according to Dr. Lee Braine who is the CTO at Barclays. As he explained:
“Some banks may also look to explore the more decentralized deployment option of hosting their nodes themselves,” said Braine. “By participating in the LedgerConnect proof-of-concept, Barclays is gaining experience of a distributed ledger private network aimed at connecting both market infrastructure-hosted nodes and bank-hosted nodes.”
Therefore, LedgerConnect will run partly on a permissioned blockchain based on IBM’s blockchain platform – and all of the apps within the store will be Hyperledger-based. Still, the founders are open to other blockchain solutions that may make use of the app store.
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