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IHS Markit Developing Blockchain System for Syndicated Loans

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With a revenue of $3.6 billion, IHS Markit is certainly a leading player in the data provision industry, supplying global markets such as the automotive, energy, financial services and defense markets. The last couple of years has seen them make a few significant movements to grow, with the merger of IHS and Markit in 2016, then their purchase of Ipreo from Blackstone and Goldman Sachs only a week ago, for a reported $1.86 billion.

And Now for Blockchain

The next stage of the IHS growth cycle lies in blockchain technology, with the firm reportedly developing a blockchain system that will deal with the payments part of syndicated loan trading. The idea behind using blockchain is to reduce the amount of work required to reconcile cash when multiple lenders are in play – such as with syndicated loans. The system, known as Stax, is currently in development, and will run on smart contracts. The token system that sits on the blockchain will represent the fiat money involved in these loans.

At this stage, no details have been released as to which companies will be holding nodes on the Stax system when development has finished, but it is likely that some big names will join up should testing prove successful, as the reduced workload involved in settling syndicated loans in what is now a $1 trillion market would no doubt represent the opportunity for significant savings. And John Olesky, Head of Product Management, thinks that the new system could be ready before too long, and the company have already been in multiple talks as they prepare for testing:

We have built this in a generic way and we have already met with exchanges and talked about derivatives and other asset classes…We believe the platform will be ready earlier than a year from now but we think it will be about a year for production launch, including testing.

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