The global FX market is to be disrupted and improved by major blockchain leaders. Finteum and Fnality have announced that they are partnering to create interoperability between Fnalty’s USC Ethereum-based solution (Utility Settlement Coin) and Finteum’s application (the app is built on R3’s platform Corda).
The interoperability creation will focus on intraday FX swaps executed among large institutions and will allow the FX trading to be completed instantly and without settlement risk.
Currently, the foreign exchange market is the largest and most liquid in the world, as reported by press, but the problem is that it is traded over outdated technologies and systems. This issue creates a variety of duplicative processes and inefficiencies.
What Finteum will do is utilize R3’s platform Corda to deliver an efficient global financial market for intraday liquidity for users.
Through the use of Finteum, all market participants will have access to a shared data source that tracks their trades and orders, a process that will ensure smooth settlement of the transactions and smoother information exchange with third parties, such as regulatory bodies.
Fnality provides a digital cash system that utilizes the technology of blockchain to settle various financial transactions – a feature that will bring much more efficiency and transparency to the global FX market.
Another feature of the collaboration is the instant settlement that market participants will enjoy. The partnership essentially creates a new trade settlement business model: through Finteum, funds in the USC will be reversible before an order is placed in the LOB (limit order book).
Financial institutions use USC to transfer ownership between currencies using central banks’ money. The Finteum platform allows this process to happen automatically. The settlement can take place 24/7 – a conveniency that reduced counterparty risk and involves fewer stakeholders along the way.
This is what the Chief Commercial Officer at Fnality said about the partnership, as reported by R3:
In addition to cost savings, the availability of USC as a payment asset offers new revenue potential to FX trading desks, brokers, and trading platforms. They will be able to earn returns by lending out cash that they are not using, or by bringing more market liquidity to the future markets in intraday FX swaps.
More about the Corda platform and R3 can be found here: