DTCC Announces Results of Smart NAV Blockchain Trial

The Depository Trust & Clearing Corporation (DTCC) has made a significant announcement regarding the results of a proof of concept (PoC) that delved into posting fund net asset value (NAV) data onto a blockchain. In collaboration with Chainlink Labs, the DTCC worked with various industry players such as asset managers, fund administrators, and custodians to conduct the Smart NAV trial.

Jennifer Peve, the DTCC’s Global Head of Strategy & Innovation, had previously hinted at this project earlier in the year when discussing the organization’s perspective on tokenization. The Smart NAV trial involved ten participants including American Century Investments, BNY Mellon, JP Morgan, and State Street, among others.

The focus of the trial was on distributing data rather than collecting it, building upon the DTCC’s existing Mutual Fund Profile Service I (MFPS I). This trial hinted at a potential shift towards a more distributed data collection process, aligning with the growing trend of tokenization projects.

Using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), messages were sent from the DTCC infrastructure to the private DTCC Ethereum blockchain during the PoC. Clients were able to access the data through various methods including an API and smart contracts.

The benefits of this trial included real-time data access and increased automation, paving the way for future blockchain use cases. The DTCC sees endless possibilities for the Smart NAV functionality, including applying it to disseminating key reference data and workflow automation for portfolio rebalancing.

While this isn’t the first instance of blockchain being used for such purposes, with Vanguard partnering with Symbiont in 2017 for a similar project, the DTCC’s Smart NAV trial showcases the potential for blockchain technology in the financial industry. As more tokenization projects emerge, the need for secure and efficient data distribution on the blockchain will continue to grow.