The World Second Largest Index Fund Manager Rolled out Blockchain Securities Pilot Successfully

By Robin Wong | June 12, 2020

Vanguard – top 2 globally index fund managing firm – reportedly disclosed the success status of the first pilot phase, regarding its blockchain-powered asset-backed securities.

Specifically, Vanguard has teamed up with a major U.S.-based ABS and DLT provider Symbiont, big names in the financial sector BNY Mellon and Citi, to work on a model for the entire life cycle of securities settlement, by employing a DLT network. 

Vanguard and Symbiont reportedly predicted that the phases of the pilot in the future will help to finalize the integration process of smart contracts into the ABS issuance, making “increased information flow, enhance[d] price discovery and secondary market liquidity” available, along with the automation of carrying out “key corporate actions”. 

Up to April 30th, Vanguard is reportedly handling the management of $5.7 trillion in assets across the globe, providing 425 funds to over 30 million investors.

Warren Pennington – director of Vanguard’s Investment Management FinTech Strategies Group – shared his remarks regarding the pilot, claiming it to creating “a more efficient business model for future generations of capital market activity”.

“By digitizing and streamlining the ABS issuance process, we will be able to increase the speed and transparency of transactions while reducing costs and minimizing exposure to risk.” 

Mark Smith – head of Symbiont – compared the competition of the pilot program as “a momentous step forward in fundamentally changing capital markets infrastructure through blockchain technology, and 2020 may be the year that, for the first time, market participants will see a live ledger-based issuance.”

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