From a $4 Trillion Recordkeeping System to This Altcoin’s Network—Starting With Real Funds!
CSD BR, which operates the recordkeeping infrastructure for approximately $4 trillion in assets in Brazil, has begun maintaining ownership records for selected BTG Pactual investment funds on the XRP Ledger as well.
Some funds managed by Latin America’s largest investment bank, BTG Pactual, are at the center of a new application using real financial records on a public blockchain. According to an announcement reported by CoinDesk, Brazilian recordkeeping, custody, and settlement infrastructure operator CSD BR is mirroring ownership information for these funds on the XRP Ledger as a secondary record.
CSD BR’s systems hold more than 22 trillion reais, or approximately $4 trillion in recorded assets. The new application is limited to selected funds: While fund shares are represented by tokens on the network, CSD BR’s existing database remains the legally authoritative system for recordkeeping, custody, and settlement.
A time-consuming reconciliation process for fund records is changing
When an investor buys fund shares, the custodian updates the ownership record, while banks acting on the investor’s behalf also maintain their own records. Regularly reconciling these two sets of records takes time and money, and potential discrepancies can delay transactions.
Under the new setup, approved banks and companies will be able to access the record copy on the XRP Ledger directly and compare the information with CSD BR’s database at any time. This will replace a process based on institutions reconciling their own ledgers after the fact with a shared, verifiable record layer.
What stands out about the application is that it is not a trial conducted solely with test assets or on a closed network. Real fund ownership records are being mirrored on a public blockchain where anyone can see the transactions.
Records are public, participation is controlled
Although anyone can monitor transactions, CSD BR will determine who can hold and transfer the tokens. To do so, it will use the XRP Ledger’s Multi-Purpose Token standard, which gives financial asset issuers additional controls.
Participants will have to pass identity verification and anti-money laundering checks. At the request of a regulator or court, CSD BR will be able to freeze assets or reverse transactions; these changes will also be visible in the blockchain record.
Founded in 2018, CSD BR operates as an infrastructure operator authorized by the Central Bank of Brazil and the country’s securities regulator.
Direct issuance on the blockchain is next
CSD BR and Ripple plan to test issuing assets directly on the XRP Ledger and allowing them to be traded among approved participants once the system for mirroring records on the network is established. Real estate and agricultural receivables in Brazil are among the assets being considered for subsequent phases.
Direct issuance and trading on the blockchain could make it possible to complete settlement in seconds, compared with the one day or longer it can take for traditional securities. The application, which begins with live fund records, is building the infrastructure for testing this next step.