The London group, to be renamed NEX Group from January, is preparing to process thousands of foreign exchange trades on blockchain technology. ICAP plc (LON:IAP) will supply the code to customers in March so institutional investors can more transparently track and value deals in the spot market, which trades $1.7tn a day.
ICAP, in conjunction with US technology group Axoni, will utilise its Traiana subsidiary, which acts as a messaging hub for $2tn of forex, 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
Jenny Knott, chief executive of post trade risk and information at ICAP, commented:
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.
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 reconciles transaction, reference, market and portfolio data before it is sent out, either to regulators, clearing houses or back to financial institutions themselves. In the blockchain the trading data acts as a “genesis block” and the encrypted details are passed to other parties for deciphering and verification.