Digital Asset’s Daml and Canton smart contract solution is the technology of choice for Equilend’s 1Source, a DLT solution initially targeting securities loan reconciliations.

EquiLend’s platform processes USD 2.8 trillion in monthly securities lending operations. It is an industry initiative backed by Bank of America, BlackRock, Credit Suisse, Goldman Sachs, JP Morgan, Morgan Stanley, State Street, and others.

The problem Equilend hopes to address with 1Source is reconciliations because each bank has a separate copy of the securities lending transaction. The challenge is not so much the initial transaction but keeping the changes synchronized between the counterparties.

If there are differences in the way changes are recorded, it can lead to settlement disruptions and poor trading decisions. In addition to addressing these issues, the hope is that a shared technology platform could reduce the need to maintain internal systems for reconciliation, Equilend previously told Ledger Insights.

“EquiLend’s 1Source initiative represents a once-in-a-generation opportunity to jumpstart the industry with an innovative new approach to lifecycle management,” said Ken DeGiglio, EquiLend’s Chief Information Officer.

A 1Source proof of concept with industry participants was completed by the end of 2022, so the solution is currently in the build phase, with release plans for 2024.

The question is whether it will launch in time for the T+2 to T+1 settlement switch that will take place in May 2024. Stock lending slows down settlement. That’s because brokers lend shares, and if the customer decides to sell the shares, the broker has to replace them and deliver the shares for the trade to settle.