Cobalt DL Targets FX Post-Trade Costs with Distributed Ledger Technology
Cobalt DL – London – Financial technology firm Cobalt DL has commenced beta testing with a number of leading FX participants on its private peer-to-peer network that uses distributed ledger technology to significantly cut post-trade cost and risk.
After a year of design and testing and following a successful completion of a proof-of-concept with one of the largest FX market making banks, the platform will launch in 2017, with eight leading institutional FX participants already committed to the service.
From a single transaction, existing post-trade infrastructure creates multiple trade records for buyer, seller, broker, clearer and third parties. By creating a single, shared view of a transaction, Cobalt DL frees up back and middle office resources that are currently overwhelmed by the need for continuous reconciliation across multiple systems.
The technology is designed to integrate seamlessly with all trading sources and venues, providing immediate efficiency benefits which analysis has shown to deliver a significant cost reduction when compared with existing infrastructure. FX market participants incur multiple unnecessary license fees, ticketing charges, IT overheads and staff costs as a result of the complexity of existing structures.
Global financial technology specialist First Derivatives has invested and partnered with Cobalt DL, providing services to further develop the technology. Cobalt DL will licence First Derivatives’ Kx technology, a market-leading big data solution, as a core part of its platform.
Andy Coyne, Co-Founder of Cobalt DL, comments: “The emergence of agile, sophisticated technology such as distributed ledgers has set the scene for an alternative to the inflexible post-trade infrastructure that financial market participants are forced to use today. Cobalt DL’s combination of market expertise and forward-thinking technology is dramatically shaking up the post-trade space and significantly reducing costs for market participants.”
The network is driving adoption of standardized post-trade swap data models and workflows.
The market maker will contribute real-time crypto market data before expanding into equities.
Pyth is built on a blockchain to handle receipt and distribution of fast-moving data.
Interoperability with current capital markets infrastructure is a challenge.
Investors have more understanding on the operational side of crypto markets.