Banks sign up to blockchain trial for processing FX trades

posted almost 6 years ago
A venture backed by eight major banks and financial institutions has begun beta testing a peer-to-peer network that aims to use blockchain distributed ledger technology to slash billions off the cost of processing foreign exchange transactions.

Fronted by ex-Citi and Deutsche Bank currencies supremo Andy Coyne, Cobalt DL's initiative is the latest to move forward with serious real world uses of a technology which promises to simplify banks' unwieldy computer infrastructure.

Like other blockchain developments under way, it seeks to generate huge cost savings by creating one sole verified record of a transaction or contract and giving all parties access to it. The system is due to go live in 2017.

Currently multiple records for currency trades have to be created for buyer, seller, broker, clearer and third parties and then continuously reconciled across multiple systems. The move into beta-testing follows a year designing and proving the viability of the new scheme with one of the largest FX market-making banks.

Coyne, who until last year was chief executive of ICAP-owned currency market infrastructure company Traiana, declined to name the institutions involved in the next stage of trials but said they included several of the top-10 banks who dominate the giant $5 trillion a day global market in currencies.
Tags: news, blockchain