ICAP looks to blockchain for FX trades
ICAP, a UK-based financial services firm, is jumping on the bandwagon and getting ready to process foreign exchange (FX) trades on blockchain, according to the Financial Times.
As Banking Technology reported earlier this year, ICAP’s post trade risk and information division completed a proof of technology test case for blockchain – so its interest is not entirely new.
In the latest development, ICAP, which will be renamed NEX Group from January, will “supply the code to customers in March so institutional investors can more transparently track and value deals in the spot market, which trades $1.7 trillion a day”.
As always in the world of fintech, competitors are up to something similar. Central securities depositary Euroclear and its US-based partner Paxos, have finished a two-week blockchain pilot for more than 600 test deals in the London bullion market. Both projects are major steps in blockchain gaining traction and acceptance in this arena.
According to the Financial Times, ICAP, with US technology group Axoni, will use its Traiana subsidiary, which acts as a messaging hub for $2 trillion of FX, fixed income and swaps deals. “It is set to become a key part of NEX as it sheds the brokers that built ICAP and focuses on digital market infrastructure”.
Jenny Knott, chief executive of post trade risk and information at ICAP, says: “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.”
She adds: “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.”