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ClearToken completes PoC of its digital asset clearing house

ClearToken, the pioneering Clearing House for digital assets, has achieved a significant milestone by successfully completing its Proof of Concept (PoC), marking a crucial advancement in the digital asset ecosystem.

Over the past six months, ClearToken has collaborated with more than 60 industry participants, spanning both traditional financial markets and emerging digital asset service providers.

The objective was to develop a PoC for the centralized clearing of digital assets, a critical missing piece in the digital asset landscape. Through a combination of in-house systems development and integrations with leading financial technology solutions providers, ClearToken has convincingly demonstrated that spot digital assets can be efficiently captured, novated, risk-managed, netted, and settled using existing market infrastructure techniques.

24/7 risk management and settlement of digital assets and derivatives

ClearToken’s partnerships encompass trading venues, market makers, prime brokers, banks, custodians, asset managers, and software vendors, establishing a robust framework for 24/7 risk management and settlement of digital assets and their associated derivatives.

Importantly, the PoC participants have provided valuable insights that will shape ClearToken’s future rulebook and operational principles. These insights are critical for extending clearing operations to enable weekend and same-day (T+0) settlement, a substantial improvement over the current T+1 and T+2 settlement timelines common in most securities markets.

Benjamin Santos-Stephens, CEO of ClearToken, expressed his gratitude to the industry professionals who contributed to the development of a viable clearing solution for digital assets. “The ClearToken team is looking forward to the next chapter, as we work towards launching the first regulated clearinghouse for digital assets.”

Adapting well-understood existing processes used in traditional market structures

ClearToken plans to release a comprehensive report detailing the lessons learned during the PoC phase, which will be presented to regulators and stakeholders as part of the authorization process.

Furthermore, the company intends to prepare its PoC technology systems for production use, laying the foundation for future user testing and certification programs.

The firm will maintain its active engagement with stakeholders, service providers, and potential clearing members as it seeks authorization as a Recognized Clearing House (RCH). ClearToken has already responded to the UK Government’s HM Treasury consultation on the proposed financial market infrastructure sandbox, known as the ‘Digital Securities Sandbox,’ for digital securities settlement. It plans to continue collaborating with industry stakeholders to advance the goals of the Clearing PoC.

Niki Beattie, Chair of ClearToken, emphasized the importance of risk management and settlement practices in digital assets, particularly in addressing the readiness gap for institutional market participation. “We know that demand is increasing, and by working together to adapt well-understood existing processes used in traditional market structures, we can create a safe and sustainable market for regulated participants and for the markets of the future.”

ClearToken’s successful PoC marks a significant step toward bridging the gap between traditional financial markets and the evolving world of digital assets, ultimately paving the way for institutional investors to confidently participate in the digital asset space.

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