Profit & Loss recently reported on a new venture designed to settle FX swaps via blockchain-based technology. Galen Stops takes a closer look at the genesis and the mechanics of this solution. Having worked in liquidity management at Bank of Ireland and then UBS, Brian Nolan observed firsthand how the regulatory expectations around intraday liquidity […]
Tag: Distributed ledger technology
Distributed ledger technology
Arjun Jayaram, CEO of Baton Systems, talks to Profit & Loss about how distributed ledger technology (DLT) is already helping the FX market, why the hype cycle around this technology is coming to an end and who he expects to win the “blockchain wars”. Profit & Loss: What is the problem in the FX market […]
R3 has raised $107 million in the first two of three planned tranches in its Series A fundraising round. This represents the largest single investment in a firm providing distributed ledger technology (DLT) services to date.
According to data from CoinDesk, which tracks venture capital (VC) investment in blockchain and bitcoin focused firms, only Coinbase, Circle Internet Financial and 21 Inc, have now raised more VC money than R3. However, none of these firms are exclusively focused on DLT and in some cases they have clearly conducted more fundraising rounds.
NEX Optimisation will be launching its new NEX Infinity platform in July, when its clients will be able to start testing spot FX and cash equities in the Infinity distributed ledger.
In addition to its use of blockchain technology, the new architecture also utilises cloud hosting in a bid to simplify trade processing, improve clients’ control of their data and reduce costs. As a Software as a Service platform, Nex Infinity will also allow third-party technology providers to offer their services on the platform.
Calypso Technology has become the first firm to partner with R3 to develop capital markets applications on its Corda distributed ledger-based smart contract platform.
The two firms are currently developing a multi-party trade confirmation solution and testing it with multiple financial institutions.
R3’s Corda – which will be open-sourced globally on November 30 – is designed to be an open and inclusive smart contract platform that enables third party providers and partners to build and operate distributed ledger applications using common code and protocols to ensure interoperability.
Cobalt DL (Cobalt), which plans to launch distributed ledger-based FX post-trade platform in 2017, has announced a partnership with SETL to deploy its Open CSD distributed ledger within the platform.
Although a spokesperson for Cobalt declined to name a targeted go-live date for the platform next year, the firm claims that it has 15 institutional FX participants already committed to the service.
Profit & Loss previously reported on Cobalt’s plans to try and reduce post-trade costs for financial services firms by creating a shared view of trade data.
CLS Group is planning to release a payment netting service, CLS Netting, for buy and sell-side institutions’ FX trades that are settled outside of its settlement service.
Firms will have the choice of connecting to the service via existing channels or by utilising Distributed Ledger Technology (DLT).
CLS claims that the global FX market is limited by the lack of a standardised payment netting process for trades not settled within CLS. The firm claims that in many cases institutions are forced to intervene manually to complete the process, leading to inconsistent and bespoke approaches to netting throughout the market, which in turn results in higher costs and increased intra-day liquidity demands.
R3 and Axoni, along with seven buy and sell side firms, are working to explore ways that blockchain technology can be used to simplify reference data processes.
The group, which includes Alliance Bernstein, Citi, Credit Suisse and HSBC, recently completed a multi-month proof of concept (PoC) exercise aimed at building a distributed ledger prototype that can enhance the risk management, cost and efficiency issues inherent in managing financial reference data.
The prototype was created using Axoni Core, the firm’s proprietary distributed ledger software, to simulate the collaborative management of reference data, as well as the use of that reference data for corporate bond issuance.
The technology is designed to enable participants to interact with reference data after issuance, with any proposed changes requiring validation by the underwriter to ensure the ledger provided a single, immutable record of all data related to the bond.
R3 has established a foothold in China