Abu Dhabi Securities Exchange enters blockchain deal with SWIFT

ADX will work with other organisations to explore the use of blockchain to speed up securities processing



Abu Dhabi Securities Exchanges (ADX) is among seven organisations to sign a memorandum of understanding with financial messaging service SWIFT to explore the use of blockchain for post-trade operations.

The exchange will work with fellow central securities depositories Caja de Valores, Depósito Central de Valores, Nasdaq Market Technology AB, National Settlement Depository, SIX Securities Services and Strate Ltd to collaborate on the project, with other new members to join in the coming weeks.

They will explore the use of digital ledger technology for securities processing in areas including multi-party contracts and an e-voting solution that supports existing standards.

“The exchange will open channels of constructive dialogue with various stakeholders to identify the common principals, standards and business rules needed for the successful implementation of DLT in post trade operations, with the aim of enhancing the speed and security of capital market transactions,” said ADX CEO Rashed Abdul Karim Al Balooshi.

The wider agreement also involves collaboration in research and development and helping to define the role of infrastructure providers in markets based on distributed ledgers.

Use cases for blockchain, the database technology behind cryptocurrency bitcoin, are being explored across the world due to its security and transparency benefits.

The system’s supporters claim it is able to provide a tamper-proof digital ledger of every transaction recorded between parties that is fully visible to all sides.

In December, the Australian Securities Exchange revealed plans to implement a blockchain ledger system for settlement and clearing by the end of March.

Dubai has been leading efforts to encourage blockchain use in the GCC with a commitment to use the technology for all government documents by 2020.

Read: Dubai selects IBM, Consensys for city-wide blockchain project