Tata Consultancy Services (TSC) is successfully deploying the world’s first cross-border securities settlement system. Maroclear based in Morocco and the Kuwait Clearing Company are now settling transactions through the new BaNCS Network.
Introducing: The BaNCS Network
The BaNCS Network is a private blockchain ecosystem through which customers can collaborate by connecting to a single ledger system. It is designed for use by central securities depositories (CSDs). This includes access to information on a real time basis. Notably, current BaNCS customers now have access to banking, market infrastructure, custody and insurance domains through this blockchain platform. Consequently, this can open up access to new markets, services and business lines across geographical boundaries by using cash coins.
Cash coins are a form of digital currency that attaches to a fiat currency at a fixed market rate. In turn, their operations occur on a private blockchain network. Moreover, this digital currency allows a blockchain network to enable seamless and real-time delivery versus payment (DVP) settlement of cross-border securities transactions. Likewise, instantaneous settlement significantly reduces the currency risk associated with such transactions. It also addresses issues arising out of exchange rate fluctuations during the time it takes to settle. Furthermore, this settlement model has the potential to significantly reduce liquidity requirements for participants while also decreasing settlement risks.
The Results of Testing
In tests run by the two aforementioned CSDs, a set of equities and fixed income securities from both the Kuwaiti and Moroccan markets demonstrate the innovation behind the BaNCS Network. When in operation, the cross-border settlement instructions for these securities are matching and settling instantaneously on the blockchain ledger. This blockchain ledger uses Quartz’s Smart Solution for Cross-Border Settlements. The associated notifications on the status of transactions appear on the BaNCS Network. In turn, they are instantaneously available to the respective CSDs. Therefore, these transactions are settling using cash coins held in the Quartz Blockchain. This shows a true delivery approach versus a payment settlement model.
TCS Promotes Long-Term Value and Innovation
Accordingly, this is an important venture for future blockchain development programs. R Vivekanand, Vice President and Co-Head, TCS Financial Solutions, stated that:
“The BaNCS Network has been created by TCS to leverage the power of Blockchain to deliver exponential value from ecosystems, a part of TCS’ Business 4.0™ vision. We are pleased to see our TCS BaNCS customers, Maroclear and Kuwait Clearing Company, leverage this capability, vindicating our commitment to provide sustained long-term value and innovation to our customers. Real-time cross-border settlement with cash coins reduces risks, costs and has the potential to create enhanced liquidity in markets in Middle East and Africa.“
A Multi-Asset Class Solution
TCS BaNCS for Market Infrastructure is a multi-asset class solution designed for high performance transaction management. Specifically, the solution supports end-to-end trade and post-trade functions, including trade matching, settlement, risk and collateral management. Additionally, it also provides surveillance, unified clearing, issuance, depository and registry functions around a common reference data layer.