British funds transaction network Calastone completes first phase of blockchain distributed market infrastructure proof-of-concept test for the trading of mutual funds.

The move is aimed at further minimizing frictional cost of trading mutual funds by placing marketplace on a blockchain. It also aims at using blockchain to develop a common marketplace for mutual funds trading and settlement.

According to Calastone, the results from phase one proved that it can be done. Phase two of tested distributed infrastructure model will engage design partners.

In phase one, the model processed transactions equivalent to a full day’s trading sourced from across the company’s global transaction network, which covers 1,200 fund distribution and fund manager customers across 34 markets.

Calastone chief information officer Campbell Brierley said: “Placing the market on a blockchain effectively opens the door for potential efficiencies across the whole transaction lifecycle in excess of those that could be achieved via the optimisation of transaction processing alone.”

Calastone deputy CEO Ken Tregidgo said: “The positive results of our PoC has shown that by using distributed ledger technology across the entire lifecycle of mutual fund transactions, from order placement through to the settlement and payment, industry participants could significantly benefit from simpler processing.”