During the past couple of years Broadridge‘s distributed ledger repo (DLR) solution has grown significantly. Two years ago it was processing around $1.5 trillion in monthly transactions, rising to $5.9 trillion a year ago and $7.4 trillion last month. That was just using US Treasuries as tokenized collateral. Now it is adding support for other G7 securities as well.
Since launch, a major use case has involved big banks positioning liquidity in subsidiaries around the world. Since the Great Financial Crisis, using repo for intragroup lending has become a popular tool. Given some of these transactions may involve international subsidiaries borrowing and lending, it may often be simpler to use local securities rather than US Treasuries.
While Broadridge was a first mover, collateral and tokenization are now moving at pace, with DTC’s tokenization efforts going into production in October and its Collateral AppChain in Q4. Broadridge is a DTC partner, but we’d observe some competitive dynamics at play, with DTC as the Goliath.
“Tokenized financing and collateral markets are not a future-state concept. Through DLR, they are proven market infrastructure operating at scale today,” said Broadridge’s Global Head of Digital Innovation, Horacio Barakat. That said, apart from being first to market, Broadridge has some other advantages for now.
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