Depository Trust & Clearing Corp. (DTCC) reported that a digital dollar could make the financial markets more capable and efficient by streamlining the settlements.
Depository Trust & Clearing Corp. is also referred to as the financial-infrastructure giant, which has potentially monitored almost every trade virtually on the above 40 trillion dollar U.S. stock market.
DTCC mentioned that the report is probably the first one that made a thorough investigation by the private sector to understand what a CBDC or central bank digital currency would mean.
The post-trade market and financial sectors have a specific infrastructure to process the security deals when the parties agree to the contract's price.
Jennifer Peve, the managing director at DTCC, stated that the new initiative has much more potential as it represents an idea and an innovation. The company now expects that digital transformation can reshape the markets and the structure of the market in the upcoming days.
By stating this, Peve referred to a recent operation with some major renowned banks like Citigroup or C, Bank of America or BAC, State Street or STT, and the nonprofit Project of Digital Dollar. The program aims to test the valuable use of a digital dollar in the financial markets.
While talking on this subject, the managing director also mentioned that a central bank digital currency in the U.S. market should be explored carefully and in consultation with key stakeholders in the public and private sectors.
On behalf of the DTCC, a central bank digital currency could help the settlement in terms of speedy transactions. According to them, distributed ledger technology and tokenized asset could bring about revolutionary changes in the market.
This is because they simplify the agreement and reconciliation of trades in the financial market.
Previously in August, employees of DTCC announced that they were processing a lumpsum amount of trades on a blockchain due to Project Ion. Federal Reserve Chairman Jerome Powell has shown no rush in issuing a digital dollar when asked.
Still, the Bank of International Settlements has stated that they are looking forward to it.