The FT reports that SETL, the UK fintech group, has received a licence to operate a central securities depositary from the French market regulator, the Autorité des Marchés Financiers, a move the FT describes as ‘a further coup for proponents of blockchain technology’.
SETL will be able to connect its ‘permissioned-blockchain’ network to the ECB operated Target2 securities settlement system.
SETL’s platform does not use a cryptocurrency, instead allowing settlement in fiat currency.
SETL’s blockchain-based CSD is likely to go live in early 2019.
Comments
Settlement and cross border remittances are popular uses cases for blockchain trials and proofs of concept.
I assume the AMF’s approval relates to SETLs OpenCSD service, which allows market participants to run permissioned registry service for payments, settlement and clearing of cash and other financial instruments. Participants can include custodians, registrars and payment institutions.
SETL claims the platform can support 10,000 transactions per second due to its ‘efficient consensus mechanism’ and small number of participating nodes, confirming the assertion that you can have your blockchains big and slow (bitcoin) or small and fast (SETL), but not big and fast.
The company expects to take on a small number of, so far unnamed, subscribers initially, and to work with a number of development groups who wish to design and build functionality around the OpenCSD platform.
SETL seems like a great example of ‘blockchain’, in a certain guise, finding a role as an enabling technology at a time when existing technologies/systems need an upgrade. But it’s about as far from the public blockchains of bitcoin and ethereum as you could get before you’d feel obligated to drop the term ‘blockchain’.
What do you think?
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