Two Electronic Trading Houses Join Blockchain FX Venture Cobalt

Blockchain, FinTech, Innovation, Investing, Regulation | May 11, 2017 By:

Blockchain-based foreign exchange trading post-trade processor Cobalt has partnered with electronic trading houses Citadel Securities and XTX Markets.

London-based Cobalt, founded by former bankers, is a private peer-to-peer network that uses blockchain technology designed to reduce risk and cut post-trade costs. The company claims its platform can reduce reconciliation and operational costs by up to 80%. Cobalt’s system is expected to go live in Q3.

Citadel Securities and XTX Markets are the latest of 22 banks and traders involved in advance testing of a system run by Cobalt. The banks that are committed to Cobalt include Citi, Deutsche Bank and UBS Bank. BNP Paribas, and Bank of America Merrill Lynch. Commerzbank and Santander are finalizing their involvement as well.

“We’ve got significant endorsement from two of the largest institutional FX trading participants in the market, who are leaders in technology,” said Adrian Patten, Cobalt’s chairman and co-founder and a former foreign exchange trader at UBS and Deutsche Bank.

“We are delighted to be part of the Cobalt initiative to reduce risk and cost in post-trade FX, and we look forward to working with them and other members of the network to transform the landscape,” said XTX co-chief executive Zar Amrolia.

Patten added that the company’s goal is to be the ledger for the post-trade FX market. “What we’re trying to do is to have a one-time reconciliation for FX transactions – a golden record – and post that transaction and cashflow information onto one distributed ledger,” he said.