Major European fiscal institutions are jointly launching a blockchain-based platform for the investment fund industry.

The arrangement was initially incubated by the Luxembourg Stock Exchange and its chapter Fundsquare, which, alongside Clearstream, Credit Suisse Asset Management and Natixis Investment Managers, accept announced a Series A investment round for "FundsDLT."

FundsDLT for cost reduction

Co-ordinate to a March 17 announcement, the FundsDLT platform is based on Ethereum's (ETH) blockchain and allows asset managers, distributors, asset servicers, and the supply chain to reduce costs. The cost reduction is achieved by removing redundant activities while providing transparency and allowing digital fund distribution. A Credit Suisse Asset Direction representative told Cointelegraph:

"FundsDLT is a platform for the investment fund industry using distributed ledger technology (DLT), with the aim to streamline fund distribution. The visitor will utilize DLT and smart contracts to provide register and account management, transaction processing as well as cash settlement / reporting."

The advantages of DLT

The Credit Suisse spokesperson as well explained to Cointelegraph that while the system is Ethereum-based, it uses the Quorum system as a private blockchain to ensure privacy and performance. The representative also pointed out that the project does not provide any exposure to crypto assets and is just employing DLT to offer services already provided by existing intermediaries with enhanced efficiency.

Natixis Investment Managers principal global operating officeholder Joseph Pinto highlighted the importance of blockchain for the industry:

"The digital transformation poses some of the greatest challenges and opportunities for the investment management manufacture today, and blockchain can play an important function. Nosotros believe it is critical for the investment direction industry to increase transparency and better operations chop-chop."

FundsDLT, Clearstream and the Luxembourg Stock Exchange did not respond to Cointelegraph's inquiry past press fourth dimension.

Blockchain sees adoption in finance

Given its potential to enhance the transparency and accessibility of systems, blockchain is seeing increasing adoption in the finance industry. Every bit Cointelegraph recently reported, over 20 Chinese banks used blockchain to process over $56 million in foreign trade transactions.

Furthermore, major banks including HSBC, BNP Paribas and Citi will soon launch a blockchain merchandise finance platform in Singapore.