DXMarkets: Blockchain Technology for Financial Marketsby Fintechnews Singapore January 13, 2016
Like many others, DXMarkets is a company that is applying the blockchain, the record of asset ownership that underpins bitcoin, to financial markets with the promise to increase efficiency and reduce infrastructure costs.
Distributed ledgers, in contrast to today’s networks, eliminate the need for central authorities to certify ownership and clear transactions. For financial markets, this means that blockchain technology has the potential to save millions in collateral and settlement costs, while enabling banks and institutions to automate their old and expensive back office systems.
Santander InnoVentures, Anthemis and Oliver Wyman estimate that blockchain technology could help them save as much as US$20 billion in cross-border payments, securities trading and regulatory compliance by 2022.
Founded in 2014 and with offices in both Singapore and London, DXMarkets aims to do just that.
Essentially, DXMarkets enables companies to issue Digitally eXchanged (DX) financial instruments, helping them to reduce costs and benefit from real-time settlement and transparency.
Most recently, the company has teamed up with Deriv Asia, a consultancy specializing in over-the-counter derivatives markets and risk management, to develop blockchain solutions for the banking industry.
Both companies are reportedly working together on a blockchain-enabled front-middle-back end architecture that involves execution, matching, clearing, collateral and custody workflows.
In a release, Singapore-based Deriv Asia detailed their three-step strategy:
- Deep dive into current banking workflows within bank’s front, middle, back office to identify areas for disruption followed by feasibility studies and impact analysis of replacing identified workstreams with blockchain technology;
- Development phase: creating digital financial instruments on blockchain, defining smart contract templates and developing interfaces with existing internal banking systems. Designing target operating models within blockchain with payments and settlements and reconciliation workflows;
- Planning and delivering: implementing blockchain, UAT and parallel runs.
Other partners of DXMarkets include RHTLaw Taylor Wessing, Colu and Grant Thornton.
Along with providing blockchain-based investment banking services, the company also operates a cryptocurrency trading platform (currently in beta) that allows users can trade bitcoins, litecoins, dogecoins, dashcoins and soon, jetcoins. Launched in April 2015, the platform had been well received and qualified as “extremely intuitive.”
DXMarkets, along with nine other fintech startups, are currently being accelerated by Fusion Fintech, an initiative that aims to foster Switzerland’s local fintech ecosystem while nurturing promising startups from around the world.
Fintech Fusion, a year long accelerator program based in Geneva, was launched in February 2015, born from a collaboration between Swiss venture capital firm Polytech Ventures and Temenos, a leading banking technology provider.
In September 2016, ten startups tackling segments such as blockchain tech, insurance, crowdfunding, payment and wealth management, will graduate from the program following the final Demo Day set to occur on September 8.
Alongside DXMarkets, these startups are AceBanker, BIOWATCH, Edge Laboratories, eINS, Fundrs, KY3C, Investivity, Scanye and Wecan.Fund.