CSDs are confronted with the challenge of not only handling these new asset classes but also ensuring that processes remain secure, efficient, and interoperable with both legacy systems and emerging blockchain infrastructures.
Key challenges include:
- High operational costs for managing and settling assets.
- Managing risks associated with migrating and integrating new technologies into existing systems.
- Inefficiencies in processing tokenised and digital assets alongside conventional assets.
- Lack of transparency and traceability in traditional settlement processes.
- Difficulty in maintaining interoperability between public blockchains and private financial infrastructures.
The Approach:
To address these challenges, Delta Capita developed and implemented its next-generation CSD platform, based on its proprietary MACH DLT technology. The goal was to equip CSDs with the tools to seamlessly handle both conventional and digital assets while leveraging the benefits of distributed ledger technology (DLT).
The MACH DLT solution for CSD’s offers a comprehensive solution that transforms how CSDs manage digital and tokenised assets. The platform consolidates various asset types—including traditional securities, digital tokens, and tokenised assets— into a single ledger. This creates a "golden record" for issuers and investors, providing complete transparency and traceability across the entire asset lifecycle, from issuance to settlement finality.
Key Features of the Solution:
- Unified Ledger: MACH DLT provides a single, immutable record of both conventional and digital assets, offering transparency, auditability, and enhanced operational efficiency.
- Interoperability: The platform supports communication through private and public blockchains, APIs, and SWIFT messaging, ensuring compatibility with existing and emerging technologies. This approach mitigates risk in complex migrations and integration efforts.
- High-Performance Infrastructure: Built for the demands of Financial Markets Infrastructure, MACH DLT can process up to 1 million state balance updates per second, ensuring scalability and speed.
- Risk Management and Liquidity Solutions: The MACH Liquidity Management System (LMS) enables Settlement Banks to manage credit risks for Custodians by facilitating off-chain representations of cash. This system allows for future integration with digital tokens or central bank digital currencies (CBDCs) if required.
- Real-time Operations: The LMS facilitates order matching, credit checks, and near-real-time asset transfers, while ensuring that credit limits and ledgers are consistently updated to reflect current activity.
Outcomes:
By adopting MACH DLT, CSDs can significantly reduce operational costs while opening new revenue streams through digital asset management. The platform's ability to handle both traditional and digital assets ensures that CSDs remain relevant in the face of rapidly evolving financial markets. Additionally, the transparency, traceability, and auditability provided by MACH DLT reduce operational risks and enhance trust among stakeholders.
Product Overview:
The MACH CSD platform is part of a broader suite of solutions designed to empower financial market infrastructures and institutions in the digital age. Delta Capita's MACH product portfolio includes:
- Digital Asset Issuance: Streamlining the process of issuing tokenised and digital assets.
- Tokenisation: Converting traditional assets into digital tokens, enabling greater liquidity and flexibility.
- Books & Records: Maintaining a tamper-proof and transparent ledger of all transactions.
- DLT Interoperability & Token Standards: Ensuring seamless integration across different blockchain technologies.
- Settlement Engine: Facilitating the real-time, secure transfer of assets.
- Digital Identity for KYC: Implementing robust identity verification protocols to meet regulatory compliance.
MACH DLT empowers CSDs to embrace the future of finance with confidence, enabling them to manage digital and tokenised assets efficiently while maintaining compatibility with traditional systems.
To learn how MACH DLT can revolutionise your CSD operations, contact:
Steve Vinnicombe, CEO (steve.vinnicombe@deltacapita.com)
Alan Philpot, Chief Product Officer (alan.philpot@deltacapita.com)
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