It was announced today that Citigroup Inc (NYSE:C) has invested in London-based FX blockchain startup Colbalt. The company also announced it added Charlotte Crosswell, former Nasdaq NLX CEO as a strategic advisor as the service gets closer to launch. Terms of the investment were not announced.
Cobalt DL, a FX post-trade processing network based on distributed ledger technology stated that Citi will be one of the launch clients for its Cobalt FX post-trade solution.
Cobalt DL has commenced beta testing with a number of leading FX participants on its private peer-to-peer (P2P) network that uses distributed ledger technology to significantly reduce risk and cut post-trade costs by up to 80%.
Cobalt DL’s FX solution is set to launch in 2017, with 15 leading institutional FX participants already committed to the service.
The Cobalt DL technology is designed to integrate seamlessly with all trading sources and venues, providing immediate efficiency benefits, which analysis has shown to deliver a significant cost reduction when compared with existing infrastructure.
Currently, FX market participants incur multiple unnecessary license fees, ticketing charges, IT overheads and staff costs as a result of the complexity of existing structures.
From a single transaction, existing infrastructure creates multiple trade records for buyer, seller, broker, clearer and third parties. 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.
James Bindler, Global Head of G10 FX, Citi
James Bindler, Global Head of G10 FX, Citi, said:
We have been impressed with the way Cobalt DL is redesigning the post-trade FX infrastructure with its practical implementation of distributed ledger technology. The Cobalt DL solution has the potential to significantly improve post-trade services by cutting costs and reducing risk for our industry.
As the company moves closer to a live launch, Charlotte Crosswell, former Nasdaq NLX CEO, joins as Strategic Advisor with a particular focus on strategic partnerships.
Charlotte Crosswell, Strategic Adviser, Cobalt DL, added:
I am delighted to be joining Cobalt DL at such an exciting time for the company and the industry. With continued scrutiny on efficiencies within the FX post-trade arena, I believe Cobalt DL is extremely well positioned to drive the changes we expect to see in this industry and deliver on real cost savings for market participants.