Jul 17, 2019

Algorand Continues Development of Advanced Financial Assets on the Blockchain as Member of International Swaps and Derivatives Association (ISDA)

By: Algorand

Coming on the heels of the announcement of the first stablecoin to integrate with the Algorand blockchain, we are pleased to share yet another milestone in our vision of establishing the infrastructure needed for new decentralized assets and financial instruments. Algorand has become a member of the International Swaps and Derivatives Association (ISDA). 

A primary focus for Algorand is expanding the breadth and depth of possible transaction classes through advanced financial instruments on the blockchain. By working with ISDA to implement their Common Domain Model (CDM) on the Algorand blockchain, financial organizations will be able to use existing templates and programming tools to easily create decentralized financial instruments.

In addition, Algorand is working with financial institutions to develop smart derivatives contracts that are in line with ISDA standards.  These smart derivatives contracts will formalize existing legal constructs into executable code, allowing for increased efficiency and automation in the financial industry.

With a substantial global market for financial derivatives representing around $10 trillion in gross market value and more than $500 trillion in notional value,* ISDA plays a crucial role in helping professional financial institutions participate in this market in a way that is transparent and standardized.  ISDA developed its Common Domain Model to allow all financial institutions to have a single, common digital representation of derivatives trade events.  It is anticipated that the Common Domain Model will save the financial industry billions of dollars by allowing standardization of financial derivatives across participants in the industry. 

“We are very pleased that Algorand is implementing the ISDA Common Domain Model on their blockchain, which will give their community access to financial tools to safely participate in blockchain-based derivatives markets.” said Ian Sloyan, Director Market Infrastructure and Technology at ISDA.

We’re excited to work with ISDA to help bring new tools and infrastructure, and encourage new participants to build products in the borderless economy.

*according to the Bank for International Settlements (BIS)