Vanguard, in partnership with technology provider Symbiont, announced the completion of the first phase of a blockchain pilot designed to digitize the issuance of asset-backed securities (ABS). In close collaboration with a large US ABS issuer, as well as BNY Mellon, Citi, and State Street, Vanguard successfully modeled the full lifecycle of an ABS settlement on distributed ledger technology (DLT) network by replicating end-to-end transaction flows.
The vision for pairing Symbiont’s Assembly DLT with smart contracts — self-executing contracts that are triggered when an agreed-upon event occurs — is to offer increased information flow, enhance price discovery and secondary market liquidity, and automate key corporate actions through the use of a common infrastructure that is open to all market participants.
The pilot provides the technical and operational foundation critical to supporting an asset issuance on a distributed ledger network. Market dynamics, such as periods of sustained volatility and illiquidity, have highlighted the need for faster, increasingly transparent and more automated markets where digital capabilities can help alleviate liquidity and funding concerns.