FXCH claims to have cleared the first ever institutional spot FX transaction
via the blockchain last Friday.
The newly established clearing house, a member-based financial utility for spot
FX clearing, says that it accepted and novated its first trades from e-FX
trading platforms using a distributed ledger for settlement.
This means that
members, or their clients, can submit trades transacted on any institutional FX
platform to be cleared and settled by FXCH.
Explaining the benefits of using blockchain bring to FXCH for spot-FX
settlements, Franck Mikulecz, founder of FXCH, says, “We embraced the
blockchain technology for its strongest but most overlooked property: the trust
machine. Streamlining steps to settle FX trades at a fraction of the current
costs is brilliantly disruptive. But the ledger opens the possibility of creating
a level of trust only tier-one banks are enjoying today, without the need to
rely on $100 billion balance sheet. That is a true revolution.”
Martin Dyring-Andersen, FXCH’s CTO, adds, “In order for a technology to find
its place, it needs to be understood by a majority in an industry. By combining
best of breed blockchain technology with our domain specific know-how, we offer
all participants a transparent distributed proof of ownership overcoming the
hard trust objections plaguing today’s process of settling FX trades.”
In a release issued yesterday
FXCH describes the state of clearing FX as an asset class as “archaic,
expensive and ripe for disruptive innovation”.
Mikulecz adds, “Our work is greatly facilitated by the incumbent Tier-one banks
generally pulling out of the FX prime brokerage market. Banks are no longer
inclined to lend their credit lines for their clients to trade FX, and the gap
this leaves in the market isn’t filled adequately by prime-on-prime providers.”