BMO launches blockchain-based pilot for fixed-income markets

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Bank of Montreal Capital Markets announced it is working with the Ontario Teachers’ Pension Plan (Ontario Teachers’) to launch a blockchain pilot.

The pilot involves a fixed-income issuance transaction between BMO and the Ontario Teachers’ Pension Plan, where BMO is the issuer and Ontario Teachers’ is buying a $250 million deposit note. The two groups are hoping to assess the viability of using blockchain technology for fixed-income markets.

“This is an important first step in developing a fully functional blockchain capability that we think will eventually allow primary and secondary trading of securities.”

“Ontario Teachers’ is committed to exploring technology and innovations that might improve our ability to serve our members,” said Audrey Gaspar, Ontario Teachers’ managing director of treasury and integration. “We are pleased to partner with Bank of Montreal in this pilot blockchain initiative.”

BMO Capital Markets said it has built a prototype settlement system, which allows the security issuers and buyer to view the transaction on the blockchain and verify the accuracy of the term sheet information and payment amounts. The system is designed to reduce costs in areas such as compliance, financial reporting, security clearing, and settlement of cash transactions.

“This is an important first step in developing a fully functional blockchain capability that we think will eventually allow primary and secondary trading of securities,” said Kelsey Gunderson, head of global trading at BMO Capital Markets. “We understand the potential that blockchain brings to the capital markets and we look forward to continuing to drive innovative solutions to help our clients.”

BMO Capital Markets is hoping to partner with other clients and institutions to evolve blockchain as an open settlement system.

Amira Zubairi

Amira Zubairi

Amira Zubairi is a staff writer at BetaKit. As a fourth-year journalism student who has written primarily about entrepreneurship, Amira has developed a growing interest in Canadian startup, business, and tech news. In her free time, Amira enjoys reading, baking and watching legal shows.