Valley Forge, Pa.-based Vanguard announced on Thursday another step towards applying blockchain technology to digitize asset-backed securities markets.

Via a partnership with technology provider Symbiont, and a collaboration with an asset-backed securities (ABS) issuer, and BNY Mellon, Citi and State Street, Vanguard was able to model the full life cycle of an ABS settlement on distributed ledger technology (DLT) in the first phase of a blockchain pilot.

“By digitizing and streamlining the ABS issuance process, we will be able to increase the speed and transparency of transactions while reducing costs and minimizing exposure to risk, which ultimately leads to a more efficient business model for future generations of capital market activity,” said Warren Pennington, principal and head of Vanguard’s Investment Management FinTech Strategies Group, in comments released on Thursday.

The  pilot is intended to provide the foundations to support asset issuance on a distributed network. In the first phase, Symbiont’s Assembly DLT was paired with smart contracts, self-executing contracts that are triggered when an agreed-upon event occurs.

Vanguard’s vision for the pilot is to offer increased information flow, enhance price discovery and secondary market liquidity, and automate corporate actions through the use of a common infrastructure open to all market participants.

The hope is that faster, more transparent and more automated markets will alleviate some of the volatility and illiquidity in asset-backed securities.

“2020 may be the year that, for the first time, market participants will see a live ledger-based issuance,” said Mark Smith, CEO of Symbiont, in comments released on Thursday.

Vanguard has partnered with Symbiont since December 2017, going live in 2019 to consume data for $1.3 trillion worth of funds using Symbiont’s technology. So far, the partnership has enabled index data to move instantly between index partners and market participants over a decentralized database, according to Vanguard, which has enabled improved benchmark tracking and cost savings for clients.