One of the World's Biggest Investment Companies Will Use Blockchain

December 13, 2017

One of the World's Biggest Investment Companies Will Use Blockchain

A giant independent investment company Vanguard, which is the second largest asset management company, has successfully completed tests of the blockchain startup Symbiont and will introduce the technology into its processes early next year.

For the last months, companies have been testing the blockchain technology to simplify the ways Vanguard uses to get information from the Center for Research in Security Prices(CRSP), which is part of the Business School of the Chicago’s University. This information is used by the company to determine the composition of index funds managed by Vanguard, and includes such data as company names, share counts, index weighting, actions’ corporation such as mergers or stock splits and many others.

The results of the research showed that the private blockchain speeds up delivery of the data from CRSP to Vanguard, removes the need for manual intervention and reduces risks. The project will be launched in early 2018, the company reports.

"Using this platform, investment managers will be able to instantly distribute, receive and process index data, which will facilitate the tracking process and provide significant cost savings that potentially results in better returns for our clients," said Warren Pennington, one of Vanguard leaders.

It is important to note that the blockchain will be used by 17 index funds totaling $ 1.15 trillion in assets, including the largest Vanguard’s fund: Total Stock Market Index fund.

In addition, the founder of the company, Jack Bogle has recently expressed negative attitude to Bitcoin, which is operating on the basis of blockchain technology. According to his report, the cryptocurrency is the modern plague, and everyone needs to avoid it.

The blockchain technology is used by many huge corporations, not only financial, but also technological and even multimedia. Among the well-known and big companies using the blockchain technology is a media giant Comcast, a payment service provider Mastercard, as well as the only investment company with more assets under management than Vanguard, BlackRock .

 

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