BMO launches blockchain-based pilot for fixed income transactions

The Bank of Montreal’s capital markets arm says it has successfully launched a pilot involving the use of blockchain in a Canadian-dollar debt deal transaction. BMO Capital Markets says the fixed income issuance transaction included the bank as the issuer and the Ontario Teachers’ Pension Plan as the buyer of $250 million of one-year floating-rate […]

By The Canadian Press | August 15, 2018 | Last updated on August 15, 2018

1 min read

The Bank of Montreal’s capital markets arm says it has successfully launched a pilot involving the use of blockchain in a Canadian-dollar debt deal transaction.

BMO Capital Markets says the fixed income issuance transaction included the bank as the issuer and the Ontario Teachers’ Pension Plan as the buyer of $250 million of one-year floating-rate deposit notes.

The bank says the pilot transaction was booked as a traditional issuance through the Canadian Depository for Securities but mirrored on a blockchain platform.

BMO says this is the first Canadian-dollar fixed income issuance to demonstrate the viability of a platform using blockchain, which is a digital ledger of transactions that is shared among a network of computers.

BMO Capital Markets built a prototype settlement system which allows the security issuer and buyer to view the transactions on the blockchain, and verify the accuracy of the term sheet information and payment amounts.

The head of global trading for BMO Capital Markets Kelsey Gunderson says this pilot was an “important first step” in developing a fully functional blockchain capability that the bank believes will eventually allow for primary and secondary trading of securities.

Also read:

OSC joins global network of regulators on financial innovation

Horizons launches blockchain ETF

How blockchain offers opportunities for investors