Blockchain in Finance/trading


Ok, I admit I struggle to get my head round Blockchain and distributed ledgers. But what started as the secure transaction transfer mechanism, and record of asset ownership (I think), for Bitcoins may yet revolutionize much of how today’s banking systems operate.

Yesterday, another 13 of the world’s largest banks, bringing the total to 22 (including: Barclays, BofA, Credit Suisse, Deutsche, Goldman, HSBC, JP Morgan, M Stanley, Goldman, RBS, UBS and others),  joined a partnership to design and apply distributed ledger technologies and develop commercial applications for the global financial markets. The project will  seek to establish consistent standards and protocols for the technology in order to facilitate broader adoption and gain a network effect.

The partnership is being run by R3CEV, a Financial Innovator, whose CEO David Rutter, was former Head of ICAP’s Electronic Broking division at EBS.

“The addition of this new group of banks demonstrates widespread support for innovative distributed ledger solutions across the global financial services community, and we’re delighted to have them on board.

We have placed an emphasis on working with the market from day one, and our partners recognise that a collaborative model is the best way to quickly, efficiently and cost-effectively deliver these new technologies to global financial markets.”

The group will collaborate on research, experimentation, design, and engineering to help advance state-of-the-art enterprise-scale shared ledger solutions to meet banking requirements for security, reliability, performance, scalability, and audit. R3 and its bank partners will establish joint working groups to lead these efforts, which will leverage the R3 team as well as experts within the partner banks. The group will work within a collaborative lab environment or “sandbox” to test and validate distributed ledger prototypes and protocols.

Niall Cameron, Head of Markets, EMEA at HSBC, said:

“This is an exciting partnership, and we’re very pleased to be involved. Innovative, open-source developments like distributed ledger technology require expertise to deliver but have huge potential, offering banks and their clients the prospect of enhanced security, lower costs and improved error reduction.”

The 22 bank partners represent a broad spectrum of companies – drawn from around the world – with expertise covering sales and trading, retail, payments, trade finance, corporate banking, wealth and asset management, and custody services. As part of this initiative, they will make available their own internal resources to help design and develop a financial-grade distributed ledger solution incorporating various open source technologies and standards.(full PR here)

Meanwhile elsewhere, Richard Olsen, FX pioneer and ex-CEO of the online broker OANDA, has launched a company called Lykke, which aims to:

“Build a global marketplace for all asset classes and financial instruments. Our marketplace will use the distributed ledger technology pioneered by Bitcoin to offer immediate settlement and direct ownership, for retail and institutional clients”

Unlike R3, Lykke aren’t enlisting banks, but rather they are running an online competition to find developers to design and build an innovative FX matching engine and platform based on distributed ledger technology.

I am sure there will be lot’s more new platform announcements to come.

One Response

  1. Paul, Very useful thanks.

    Let me know if you want to catch up for a coffee.

    Regards, Steve

    Steve Toland Global Sales MarketFactory UK Ltd., 78 Old Broad Street, 2nd Floor, London EC2M 1QP Direct: +44 (0) 203 695 7991 | Mobile: +44 (0) 7917 461539 US Support: +1 (212) 625 0688 | UK Support: +44 (0) 203 695 7997 Email : stoland@marketfactory.com

    >

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