If we’re going to have an honest conversation about blockchain (and, yes, we’ll use that word as a catchall for distributed ledger technology) we must first acknowledge that—at least as it pertains to the capital markets—it has not yielded the results many had hoped for three or four years ago.

At the beginning of 2019, I wrote an opinion piece stating that we’re seeing the death of blockchain hype. To be fair, there’s still a lot of hype to spread around, but the conversation is certainly changing. Yes, there are likely some blockchain projects still plugging away because of ego and the desire not to be wrong (and potentially getting fired), but hopefully over the last year we saw more focused efforts. Rather than experimentation and trial-and-error, in 2020 we need to see some real results that can be proven and rolled out at scale—otherwise, what’s the point?

So with that being said, in 2019 there were some notable blockchain developments made in the capital markets. Below are some of those major projects that saw progress over the last 12 months.

As I’ve stated with our machine learning and cloud recaps, this is by no means meant to be a definitive showcase of all blockchain projects on Wall Street, but these are certainly some of the more interesting endeavors that we wrote about in 2019. Nor is this list in any particular order.

As always, if I’m missing something or have something wrong, shoot me an email: anthony.malakian@infopro-digital.com

Commerzbank

Main Incubator, Commerzbank’s research and development arm, is currently engaged in handing over DLT prototypes to the bank. According to Matthias Lais, founder and managing director at Main Incubator, his team will be working to guide the bank so the implementation of the technology runs as smoothly as possible. 

“Currently we are in the process of handing the DLT prototype over to Commerzbank,” Lais says. “We have the proof that the technology works and that there is demand from our customers for such a solution—that is what counts. Going forward, Commerzbank will scale out the technology for wider adoption. Following this process, it will be in a position to offer relevant products to its clients.”

The incubator has carried out nine different DLT-based pilot projects with different partners. The most recent project, called the Euro Commercial Paper pilot, took place in January 2019 and involved manufacturer Siemens and automotive giant Continental. During the pilot, Main provided the Corda-based blockchain that supported a test transaction between the two firms: processing a money market security with a term of three days on the blockchain for the first time. 

“Normally you have settlement time of T+2, and this was [settled in] T+0,” Lais says. “This was a prototype, but the transaction was real. So there was a commercial paper issued and bought by the investor. Three days later, the money was paid back.”

https://www.waterstechnology.com/technology/4617146/commerzbank-adopts-dlt-prototypes

Nasdaq

Nasdaq says one of its blockchain projects, which is meant to track the lifecycle of a digital asset, has moved beyond the proof-of-concept phase. The offering, the name of which is unconfirmed, tackles the question of how to tightly connect from the initial issuance of an asset into a marketplace to efficiently trade tokens or assets.

“Where we see [this product] primarily fit is within the bilateral OTC markets, where you don’t currently have a trusted central operator in place. I think we more or less have left the proof-of-concept period,” says Johan Toll, head of digital assets at Nasdaq.

Once assets have been traded and matched in Nasdaq’s matching engine, they can immediately be settled back on the private, permissioned underlying blockchain, Toll says. “We can do both the custody and the settlement on the blockchain, and we can even manage both the payment side and the asset side within the same blockchain. You can then guarantee the atomic settlement and finality of those transactions.”

For the initial project, Nasdaq partnered with start-up Symbiont, in which it led an investment of $20 million in January. Other investors in that round included Citi and merchant bank Galaxy Digital. Nasdaq is working on a number of other blockchain-related projects, including a product to use in e-voting for corporate elections and annual general meetings, and a collaborative initiative involving the Swedish bank SEB that focuses on mutual funds. 

https://www.waterstechnology.com/technology/4545846/nasdaq-eyes-blockchain-project-for-otc-markets

DTCC

One of the bigger DLT projects underway in the capital markets is the one being undertaken by the Depository Trust and Clearing Corporation (DTCC), which is replacing its Trade Information Warehouse (TIW) system with a blockchain-based platform jointly built by IBM, Axoni and the industry consortium R3.

The implementation has faced several delays over the years, mostly because the technology is so complex. The TIW deadline has been pushed to March 2020 due to client requests as the DTCC braces for a series of far-reaching global changes from Brexit, along with the Commodity Futures Trading Commission’s review of its swaps regulatory framework in the US and the re-architecture of DTCC’s North American data center, impacting swaps reporting in the US and Canada. 

Jennifer Peve, head of business development and fintech strategy at DTCC, says a core challenge of the technology is its ability to run complex processes, such as the structuring of credit events for credit default swaps. Performance capabilities have long been cited as one of the main barriers to the adoption of DLT for large-scale, multi-party implementations. However, as the TIW project evolves and industry firms continue to provide feedback, Peve says that DTCC continues to learn the best applications for the technology.

“Over the course of the deployment and interim UAT [user acceptance testing] environment, we have developed an understanding of which processes are better suited to on-chain versus off-chain because those types of decisions ultimately impact performance, a key consideration when evaluating suitability for production,” Peve says.

https://www.waterstechnology.com/operations/4597791/dtcc-explores-gatekeeper-role-for-dlt-networks

The agency has also developed a governance tool, DLT AdMon, that provides a view into ledger activity and performance on a node inside a DLT network. Robert Palatnick, chief technology architect at the DTCC, says the tool was developed with open-source code from the Hyperledger Explorer module. The agency modified the Hyperledger code to work for other protocols specific to the particular business case that the DTCC is working on.  The tool was mainly developed for the DTCC’s new TIW platform.

https://www.waterstechnology.com/technology/4527161/dtcc-develops-tool-to-support-dlt-governance

Barclays & Others

Lee Braine, director of research and engineering at Barclays Investment Bank, says that as financial firms look to modernize post-trade processes, they are discussing the development of a common utility platform for industry-wide clearing and settlement.

“In terms of a long-term future state, I think there is a drive in the capital markets to look at financial market utilities,” he tells WatersTechnology. “There is a drive towards a model where utilities are performing most of our post-trade activities and [if we can leverage] this mutualization of the cost, it will be a big benefit for the industry. Using standards is obviously the right path for that and so is using common utilities.”

Braine said that the main challenge is around the type of model structure the industry agrees on and what responsibilities will be given to utility providers. One potential option is that the DTCC could function as a central counterparty that governs and maintains the distributed financial market infrastructure, which could be built on distributed ledger. In this example, it could be a post-trade utility platform. The idea is that DTCC would provide centralized governance over a decentralized technology platform. The firm would be responsible for the functionality, deployment, and testing of the DLT network.

“A key choice with distributed ledger technology is where to host nodes,” Braine said. “For example, for a Day One go-live, the financial markets infrastructure could host all the nodes and the banks could just connect into them using existing interfaces and capabilities.”

https://www.waterstechnology.com/data-management/4618781/barclays-the-future-of-post-trade-is-a-common-utility-platform

JP Morgan

At the beginning of May 2019, JP Morgan and Microsoft signed a memorandum of understanding (MoU) to form a strategic partnership to accelerate the adoption of enterprise blockchain. As a result, the Quorum platform, which is built on the Ethereum ledger, will be the first distributed ledger available through Azure Blockchain Service, thus allowing JP Morgan and Microsoft customers to build and scale blockchain networks in the cloud.

“Customers will be able to vastly simplify Quorum network deployment and operations, integrate with a portfolio of blockchain app development tools, take advantage of built-in governance and an open and flexible design that reduces the burden of managing blockchain infrastructure, and empower developers to focus on application logic and smart contracts,” says Marc Mercuri, principal program manager of blockchain engineering at Microsoft. “The partnership will enable enterprise businesses across all industries to shift their focus from infrastructure management to application development, ultimately driving transformative business value.”

He adds that the bank will also offer “a set of differentiated tools and services” specific to building with Quorum, which will be integrated with Azure Blockchain Service.

JP Morgan is just the first domino for Microsoft as the tech company will look to include more ledgers in the near future.

“While this partnership will drive preference to Quorum, Microsoft will remain platform-agnostic and plans to expand Azure Blockchain Service in the coming months to include additional ledgers and add new capabilities for ledger interaction and token creation,” Mercuri says.

https://www.waterstechnology.com/technology/4356346/microsoft-sees-trade-finance-bond-issuance-as-ripe-for-blockchain-growth

Microsoft

Further to Microsoft’s plans, the tech giant launched the Azure Blockchain Workbench in May 2018, and has since released a new tool to verify and analyze smart contracts used on the Ethereum blockchain, while its Azure Blockchain Service is being used by Bond.One to migrate its debt issuance and trading platform to blockchain technologies. Mercuri says that Microsoft believes trade finance is a sector that could benefit from blockchain adoption.

For trade finance, Mercuri says multinational corporations currently expect to get paid between 30 and 90 days after shipment or receipt of goods sent to their customers via what’s often referred to as open-account trade finance. At its core, sellers provide short-term financing for buyers as part of the trading process. As a result, sellers will often take out short-term loans on those receivables to manage their cash flows. But this is a largely manual, paper-intensive process that involves multiple parties. Because it is so complex, it can be a costly endeavor.

Mercuri says banks will often look to solve these problems with standalone, proprietary systems, but these workarounds can result in limited visibility into their corporate clients’ trade processes, payables and receivables.

“Not surprisingly, they struggle to achieve scale in their operations,” he says. “The complexity also limits the market as the costs and toil impact thousands of small and medium import/export businesses that can’t do business with either the multinational corporations or trade banks because of the overhead.”

He says when designing a network to connect the entire trade ecosystem, firms will try to create a centralized “Mega Ledger” for a single view of assets, liabilities and open-account equity. However, there’s still a series of problems with an open-account “Mega Ledger.” First, who owns a trade ledger in a multi-bank, multi-corporation world?  Second, what is the mechanism of trust for the array of banks and corporations? Third, how can firms mitigate the risk of a single point of failure? And fourth, what happens to the “Mega Ledger” during trade wars, like the one currently unfolding between the US and China?

“By distributing control yet providing consensus to deliver a single source of truth, a blockchain-based trade finance network could enable each counterparty visibility into the actual status of the credit instruments while simultaneously avoiding the problems of the ‘Mega Ledger,’” Mercuri says. 

https://www.waterstechnology.com/technology/4356346/microsoft-sees-trade-finance-bond-issuance-as-ripe-for-blockchain-growth

Bond.One

As mentioned above, Bond.One wants to unite the old and the new by putting the debt capital markets on the blockchain using Microsoft’s Azure Blockchain service. Bond.One was one of a handful of companies allowed to test Azure in its beta stage in the first half of 2019, and the Microsoft platform has allowed the company to build and implement solutions that can solve issues with fragmented market structure and inconsistent datasets in the fixed-income markets.

Still, the actual development hasn’t been easy. When Bond.One set out, it began building on Ethereum Mainnet before having to reroute to Quorum, the blockchain protocol developed by JP Morgan when it encountered three problems: unpredictable fees, long queues and encrypted, anonymous identities.

“We’re operating in the most regulated marketplace in the world, like financial securities, so you do need some control over account information, and you do need to know who you’re transacting with,” says John Mizzi, Bond.One’s chief strategy officer. “The throughput issue is solved for because we have the entire Microsoft Azure cloud, which provides a very scalable infrastructure. The transaction costs are controlled because we’re just paying Microsoft for data processing on their traditional cloud business model.”

Bond.One was preparing to execute its first bond offering by the end of May 2019 and is in talks to partner with other diversified financial institutions to help them develop their distributed-ledger technology in tandem with their existing systems by next year.

https://www.waterstechnology.com/technology/4306691/bondone-aims-to-bring-blockchain-to-bond-trading

Isda

In May, the International Swaps and Derivatives Association (Isda) announced the deployment of its Common Domain Model (CDM. 2.0) to support financial institutions’ test phase two of the digital regulatory reporting (DRR) pilot for derivatives.

ISDA has worked on the CDM for two years with input from buy-side and sell-side firms and technology providers. Phase two of the DRR began early in 2019. Other participants in the pilot include Barclays, Credit Suisse, HSBC, NatWest, Santander and Lloyds. 

https://www.waterstechnology.com/regulation/4333741/isda-deploys-reporting-blueprint-for-derivatives-markets

Digital Asset

Digital Asset is integrating its newly open-sourced DAML programming language with two external blockchain platforms as it further opens up its features. The company announced that VMware blockchain platform and Hyperledger Sawtooth will now support DAML, allowing users of those platforms to build smart contracts with DAML’s privacy features. It is the first time DAML, a functional programming language which was previously only available for Digital Asset blockchain projects, is being made available to a platform other than its own.

https://www.waterstechnology.com/technology/4268706/digital-asset-opens-smart-contract-language-to-other-blockchains

Furthermore, Isda and Digital Asset have announced an open-source reference code library, which they say will accelerate the adoption of Isda’s CDM digitization project. The initial form of the library is focused on DAML. “The specification module we have built is a reference library that we’ve created using DAML that will simplify and standardize the generation of those lifecycle events for a derivatives transaction,” says Kelly Mathieson, head of enterprise solutions at Digital Asset. “By doing that, it will allow developers to unambiguously construct lifecycle events with a machine-executable specification.”

https://www.waterstechnology.com/technology/4258016/digital-asset-and-isda-create-rosetta-stone-for-derivatives-smart-contracts

Broadridge

Broadridge is working with distributed ledger technology provider Digital Asset Holdings for several of its projects, including its proxy voting creation, which is one blockchain use case that has shown early promise. The blockchain proxy-voting proof of concept, which Broadridge conducted with Northern Trust, Banco Santander and JP Morgan, was completed in 2017. Broadridge and Banco Santander announced the two had executed the first investor vote using blockchain in 2018. Broadridge executed proxy voting using blockchain technology in Japan in January 2019.

The company also has a blockchain pilot program around repurchase agreements with Digital Asset. The project is meant to provide a single source of truth around repo trades and reduce custody and transaction costs. So far, the platform was able to process repo transactions for 19 primary dealers.

Despite these projects, however, Broadridge is not going to be a creator of blockchain technology, but rather use the technology to enhance its network value, says Tim Gokey, CEO of Broadridge.

“On blockchain, we have invested in Digital Asset Holdings, but we’re not going to be a fundamental creator of new blockchain technologies. What we’re going to do is harness blockchain. When you think about it, to get the real benefits of distributed ledger technology, you need a network of people on it. We’re really looking at where are the places we can bring that network and, therefore, add value though proxy in the governance space, both global proxy and North American proxy, and fixed income,” he says.

One aspect of blockchain that Broadridge is interested in is exploring how it can provide services around crypto assets. The company acquired post-trade cryptocurrency and derivatives solutions provider Shadow Financial Systems in early October. Gokey says the rationale behind buying Shadow is not to make a judgment on the viability of crypto assets, but to be able to provide customers who are interested in the space the ability to do post-trade activities.

“There are two things about Shadow that were interesting to us—they serve an interesting set of clients that we haven’t served as much, so getting access to those clients is certainly something that is interesting to us,” he says. “They have some capabilities and IP that we think will be beneficial either to continue being served on the Shadow platform or to bring into our own core platform. We don’t need to make a call on where crypto is going to go, but we definitely have some clients who want to pursue that, so being able to assist them and have capabilities around that are certainly a plus.”

https://www.waterstechnology.com/operations/4647836/broadridge-ceo-tim-gokey-maps-out-technology-path

Northern Trust & ASX

Northern Trust started 2019 working with one client on its private equity blockchain and after adding some new features and running a successful capital call on the platform this year, it will look roll it out to a wider audience next year.

“On the private equity side, we have a client that is live on our blockchain application. We’ve been moving along prudently in adding new features and capabilities with that client,” says Peter Cherecwich, head of the corporate and institutional services business at Northern Trust. “We will start rolling it out in earnest next year. We do believe that blockchain for private equity is absolutely fit-for-purpose and a very good use-case that we are embracing.”

Cherecwich says that executives at the bank are right now trying to figure out if it will release functionality in pieces to clients, or if they will bring in a partner firm “to invest with us and go faster” on rolling the platform out. “We are exploring it and we should know more in the January/February timeframe about what our plan is,” he says.

The other blockchain project it has in the works is tied to the Australian Securities Exchange’s (ASX) decision to replace its Clearing House Electronic Subregister System (CHESS)—its equity clearing and settlement platform—with a blockchain platform developed by Digital Asset Holdings. While that project is still progressing, the exchange has already delayed the scheduled rollout date from Q4 2020 to March/April 2021.

Northern Trust has two people in Australia working “very closely” with ASX on the project, according to Cherecwich. He believes that this blockchain will change how the institution operates as a global custodian. Today, Northern Trust has to hire a sub-custodian, which deals directly with the marketplace in Australia. 

“In the future, we will have a node on the blockchain and that sub-custodian may only do things like corporate actions posting and other types of asset servicing functions for us, potentially, but holding the security they won’t have to do anymore because we’ll have a node on the blockchain,” he says. “So it could dramatically change the cost structure [and] the timing of information that’s available to all of our customers because everyone has a direct node and direct access.”

https://www.waterstechnology.com/technology/4047886/northern-trust-plans-wider-blockchain-rollout-in-2019

https://www.waterstechnology.com/data-management/4250291/wavelength-podcast-episode-160-peter-cherecwich-of-northern-trust

Australian Securities Exchange

While the ASX has delayed its blockchain roll-out, it will spearhead the use of blockchain to settle trades by offering the service free as an initial inducement to banks, instead of using industry-standard connections via Swift and AMQP. The exchange, which has been working to replace its creaky Clearing House Electronic Subregister System (CHESS), would offer the teaser rate on blockchain beginning in the first half of 2021 for three years.  

The project is viewed as a litmus test for installing distributed-ledger technology at scale inside a large financial infrastructure. Customers would get into the ledger via a “node.” Access beyond the initial three-year period will be discussed with participants at least 12 months before it ends.

Alongside the roll-out of blockchain will be the introduction of the ISO 20022 messaging system, an industry standard for electronic data interchange and a break from ASX’s current 25-year-old communications system based on the External Interface Specification standard. The coming ISO option will permit AMQP and Swift messaging, and will go live at the same time as ASX’s blockchain option.

Those using the AMQP protocol will pay a monthly fee of A$495 (US$349.6) to connect to ASX’s own telecommunications network, ASX Net. AMQP is an open-source protocol developed by JP Morgan Chase in 2003 that is supported by banks including Barclays, Credit Suisse and Goldman Sachs.

The second option is Swift, the world’s biggest financial messaging system—but this will cost more. Besides an administration fee, any costs ASX incurs in meshing with the Swift platform will be passed on to its users on a pro rata basis. They may also be charged a setup and connection fee if they connect via Swift after the go-live date.

https://www.waterstechnology.com/data-management/4208496/asx-offers-free-blockchain-settlement-to-lure-early-adopters

World Bank

Blockchain technology could cut trade settlement time from days to seconds, a World Bank officer says.

“I think practical transactions allow you to see the potential benefits [of blockchain], such as the reduction in settlement time,” says Paul Snaith, the multilateral lender’s head of operations for capital markets, speaking to WatersTechnology ahead of the one-year anniversary of the bank’s issuance of the first blockchain bond, Bond-i. 

“You could have near simultaneous settlements if you have tokens of appropriate value. That would change some of the mechanics of how liquidity is positioned for a transaction and—this is one of the things we said about Bond-i—instead of a settlement times being T+X measured in days, it could be T+X measured in seconds,” he says. 

The World Bank partnered with the Commonwealth Bank of Australia (CBA) to build a platform on the Ethereum blockchain, and issued Bond-i in August 2018. The partners announced in May 2019 that they had successfully enabled secondary market trading of the bond, making this the first bond whose issuance and trading are recorded using distributed ledger technologies. 

Snaith says the technology behind Bond-i clearly enables individual participants to directly trade securely, and that the potential for costs savings and efficiency is huge. Settlement, which usually takes two days, could be finalized much more quickly in the future, reducing settlement risk. 

Bond-i faced some legal considerations during its development, Snaith says, often related to the fact that current regulations that are designed to protect investors reflect the technological structure of markets as they are today.

With Bond-i, only the security registration is on the blockchain. The parties considered using digital tokens for settlement, but decided against it because of regulatory constraints and tax complexity. Bond-i issuances are settled using Swift’s payment network. CBA acts as the issuing, paying and calculating agent.

The platform was built on a private version of the Ethereum blockchain. It was independently validated by a blockchain engineering team from Microsoft to ensure it was fit for purpose. The validation was then presented to investors to make sure they were comfortable with it. The World Bank runs two nodes on Microsoft’s Azure Cloud, while CBA runs on the Google Cloud. There is also potential for regulators to run a node in the future, allowing them to have a real-time view of the transactions on the ledger.

In April, the World Bank also launched a quasi-cryptocurrency called “Learning Coin” with the International Monetary Fund for internal usage. The currency doesn’t have monetary value and is intended to deepen understanding of blockchain technology. However, Snaith says the World Bank will not be issuing its own cryptocurrency.

https://www.waterstechnology.com/technology/4480766/world-bank-blockchain-could-reduce-settlement-time-to-seconds

ISO

The International Organization for Standardization (ISO) expects to come out with its first standards for blockchain technology in the next 18 months. ISO/TC 307, a committee within the body that was set up to work on standards around blockchain and distributed ledger technology (DLT), is likely to release its first standard on terminology, and will also be coming out with a technical report on smart contracts on a shorter timeframe—possibly within a year, says Craig Dunn, chair of ISO/TC 307.

“Having a common language and a common understanding of terms and the use of terms in a particular area is important, including for developing further standards in that area,” he says. “So terminology is likely to be the first area of publication standards in this space, perhaps followed by [standards for] reference architecture.” 

Dunn isn’t able to reveal the specific terms within blockchain that are currently under the scrutiny of the committee. However, given the plethora of diverse projects being developed on blockchains by companies of all kinds, there are plenty of terms that are problematic. 

https://www.waterstechnology.com/technology/4467931/iso-close-to-releasing-first-blockchain-standards

Warsaw Stock Exchange

The parent of the Warsaw Stock Exchange is entering the capital-markets technology arena, with a focus on blockchain technology. The exchange’s supervisory board has approved the GPW Tech project, a strategic initiative of GPW Group.

The project team intends to develop blockchain-based tools. The Warsaw Stock Exchange currently buys its technology from providers such as Euronext and Nasdaq. According to Marek Dietl, CEO of Warsaw Stock Exchange, it decided to create the technology arm after studying the market and realizing that the bigger stock exchanges derived around 10% of their revenue from different technologies. “We also looked at what the exchanges were acquiring recently,” he says. “[In the] last eight years [exchange acquisitions] are mainly tech companies, so there are very few exchange-to-exchange mergers.” 

https://www.waterstechnology.com/technology/4244131/warsaw-stock-exchange-bets-on-blockchain

Universal-Investment

The Frankfurt-based fund administrator is working on an ambitious project to build a solution that will allow clients to purchase funds as conveniently as readers buy books on Amazon. Right now, the process of buying a fund is slow, says Daniel Andemeskel, head of innovation management at Universal-Investment. Different intermediaries, such as banks, transfer agents and custodians, are involved; their processes are still manual and paper-based, and settlement cycles can take up to two days.

The service is going to be based on the Ethereum blockchain (though it might use other protocols in the future) and will use predictive analytics to identify clients’ interests and allow sales personnel to offer them better options. It will begin beta-testing the platform in 2020, but the project also needs regulatory approval.

https://www.waterstechnology.com/regulation/4675516/universal-investment-building-amazon-type-offering-for-funds

Fundament Group

Fundament Group, a Berlin-based end-to-end issuance solution provider for tokenized assets, is looking to partner with asset managers to tokenize assets and digitize the fund issuance industry. In October, it launched its first blockchain-based real estate bond with an issued volume of €250 million ($276.93 million). For this, it partnered with German real estate firm Bauwens, which has more than €7 billion ($7.75 billion) worth of both residential and commercial real estate properties in the pipeline. 

Florian Glatz, co-founder of Fundament, says the company is looking to partner with more assets managers to tokenize assets. “These are the people that actually have the pipeline, [as well as] management and investment experience to generate value,” he says. 

The security tokens it issues are on a public, permissionless blockchain—namely Ethereum. Investments can be made with fiat currency, but also with cryptocurrency. Fundament will onboard asset managers as its clients, and structure the financial product with them, as well as draft the prospectus. Then it will submit it to the German regulator, the Federal Financial Supervisory Authority (BaFin), for approval. Once the fund is approved, Fundament will set them up on its issuance platform, which is available on mobile and desktop. In July, Fundament became the first company to receive approval from BaFin to issue a tokenized real estate bond. The tokenized fund consists of a portfolio of German commercial real estate and will generate a planned annual yield of 4% plus returns from potential sales revenues. 

For the real estate token, currently 90% of volumes are institutional money, while retail makes up for the remaining 10%. Glatz believes in the future it will be balanced at 50:50. Fundament is planning a tokenized private equity fund next, followed by a venture capital fund. 

https://www.waterstechnology.com/technology/4677686/fundament-builds-out-tokenized-german-real-estate-offering

Tradewind

Tradewind, which offers a precious metals trading platform that incorporates distributed-ledger technology (DLT), is looking to expand to assets other than gold and silver while opening up to buy-side clients. In addition, Tradewind is also set to expand information found on its DLT to better track the supply chain and origin of precious commodities like gold and silver before the year’s end.

Michael Albanese, CEO of Tradewind, says that the goal is to expand access to metals trading to a larger sector of the market.

“When we launched, our focus was really on dealers that had a retail client base; but what we’ve been able to do is start to expand to institutions. These are regulated trust companies, mutual funds, buy-side institutions that also invest in gold and silver,” Albanese says. “What’s interesting about this segment is not only do they want to buy gold and silver, but once they buy it, there are a lot of things they want to do with it, like borrow cash against it. We’re going to help those institutions take that gold and use it as collateral in the ecosystem.”

Tradewind’s DLT-based platform VaultChain was launched in March last year. VaultChain—which began with gold in 2018 and expanded into silver later that same year—allows dealers and other institutions to buy, store, and then trade precious metals. The gold and silver is vaulted by the Royal Canadian Mint, who also confirms ownership of the physical product. Ownership records and delivery information are logged into VaultChain’s distributed ledger. The platform connects a network of liquidity providers and dealers.

https://www.waterstechnology.com/trading-tools/4569696/dlt-based-trading-platform-tradewind-looks-to-enter-the-buy-side