Cobalt DL, a fintech firm that leverages blockchain-derived concepts to deliver a single, immutable record for each trade, has announced that it 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.
The startup has already completed a proof-of-concept with one of the largest FX market making banks. The platform is all set to launch in 2017 following a year of design and testing. According to the official announcement, eight leading institutional FX participants have already committed to the service.
Existing post-trade infrastructure creates multiple trade records from a single transaction to be used by buyer, seller, broker, clearer and third parties. Moreover, FX market participants incur multiple unnecessary license fees, ticketing charges, IT overheads and staff costs as a result of the complexity of existing structures.
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 facilitate seamless integration with all trading sources and venues, providing immediate efficiency benefits and thereby substantially reducing cost when compared with existing infrastructure.
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.
“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", Andy Coyne, Co-Founder of Cobalt DL, said.
