ICAP, a leading markets operator and provider of post trade risk mitigation and information services, will start processing foreign exchange trades on blockchain and will supply the code to customers in March 2017, The Financial Times reported.
With blockchain technology, institutional investors would be able to track and value deals more transparently in the spot market.
The UK-based ICAP will utilize its subsidiary ‘Traiana’ in collaboration with US-based technology firm Axoni. Traiana acts as a messaging hub for $2 trillion of forex, fixed income and swaps deals and is set to play a key role as the system makes a transition from reliance on traditional brokers to new digital market infrastructure.
“By the end of March clients will be able to access their own node on the blockchain. We create a digital record in a cloud vault and also on the blockchain,” said Jenny Knott, chief executive of post trade risk and information at ICAP, as quoted by FT. “We are building the Nex technology platform and licensing to the Traiana legal entity, so that we can run both systems in parallel. Over time we will be able to turn off the old system.”
Traiana provides services to monitor pre-trade risk and automate post-trade processing of financial transactions in listed and over-the-counter trading markets. It reconciles transaction, reference, market and portfolio data before it is transmitted to regulators, clearing houses or back to financial institutions.
To be renamed NEX Group from January 2017, ICAP announced earlier this year that its Post Trade Risk and Information (PTRI) division completed a proof of technology test case for a distributed ledger using blockchain technology. The proof of technology leveraged the multi-asset messaging and matching Harmony network, and blockchain infrastructure provided by Axoni, to create a private, peer-to-peer, distributed ledger network using smart contracts.
The news follows reports that suggested that ICAP is building a blockchain 'Rosetta Stone' to improve its post-trade process. CoinDesk reported in July that ICAP has written an “elaborate smart contract”, adding that a beta version of the smart contract-enabled business process is expected to be ready in the first half of 2017, with a full release seen by the end of next year.
