ICAP intends to utilize blockchain to process Foreign exchange tradesMeanwhile, settlement house Euroclear is completing a 2-week trial for six hu
ICAP intends to utilize blockchain to process Foreign exchange trades
Meanwhile, settlement house Euroclear is completing a 2-week trial for six hundred test deals.
ICAP is planning to use blockchain to process thousands of Forex trades despite glaring signs showing that the emerging standard encroaches on international markets.
The London-based group that will be named NEX as from January will give the code to clients in March to enable institutional investors to transparently track and value transactions in the market, which currently trades 1.7 Trillion dollars per day.
Meanwhile, Euroclear, which is one of the largest settlement houses on earth, along with its partner Paxos, an America technology organization, have finalized a two-week blockchain pilot in the London gold market that involved over 600 tests deals.
The projects indicate further substantial steps in the improvements on markets of blockchain technology. Blockchain is, essentially, an electronic ledger in which records are kept in blocks with the aim of automating the complex systems of trust and authentication on which finances are founded.
To banks, the technology is a way of eliminating expensive back office systems, and a means of unifying data so as to satisfy increasing demands not only on customer reporting but also on customer portfolio valuation.
However, many users have experienced difficulties implementing the blockchain technology and are gradually resorting to infrastructure operators, most of whom are already maintaining the plumbing backed with deals worth billions of dollars.
ICAP, together with United States technology group Axoni, is planning to use its Traiana Subsidiary that functions as a messaging center for 2tn dollars of Foreign Exchange trades, fixed income as well as swaps deals. It is expected to become a central part of NEX as it drops the brokers who built ICAP and concentrates on the digital market network.
Towards the end of March, customers will be accessing their node on the blockchain. ICAP’s chief executive, in charge of post trade risk and data, Jenny Knott said,” We come up with a digital record both in a cloud volt and on the blockchain.”
“We are creating the NEX technology software and licensing to Traiana legal entity to enable us to run both of them in parallel. With time, we will turn off completely the old system”.
Traiana reconciles transactions, market, reference and portfolio information before it is transmitted, either to clearing houses, law enforcement agencies or even back to financial organizations. In the Blockchain system, the trading data forms a genesis block while the encrypted data are relayed to other parties to decipher and verify them.
Ms. Knott said that interest had been predominantly high particularly among institutional investors like asset managers.
Brussels-based Euroclear, housing over 27tn of bonds, funds, entities and derivatives for clients, is exploring with Paxos ways of modernizing the bullion market. Trading of gold is both bilateral and decentralized, even though banks use massive amounts of capital to settle the process. Citi, Societe Generale, and Scotiabank all took part in the trial.
“It was successful since we managed to get actual engagement with genuine customers to utilize a real product,” said Charles Cascarilla, who is chief executive of Paxos, formerly called ItBit. He went on to explain that there would be more trials before formally launching the service next year.