Citadel and XTX Markets will participate in the launch of the London-based startup’s new service later this year
A London-based startup that wants to use blockchain technology to slash costs in the $5 trillion-a-day currency markets has won the support of two major electronic trading firms.
Cobalt DL, which counts US bank Citigroup among its shareholders, said in a statement that Chicago-based Citadel Securities and London-based XTX Markets will be among those to participate on the launch of its peer-to-peer network later this year.
Adrian Patten, co-founder and chairman of Cobalt, said the addition of the market-makers can help his firm to grow. Cobalt wants to blockchain technology to replace multiple trade records kept by banks, brokers, and clearing houses with one. It says its technology will cut post-trade costs by up to 80% and “significantly reduce risk”.
Kevin Kimmel, global head of eFX at Citadel Securities, said the launch of Cobalt’s platform will make currency markets more efficient, particularly in terms of credit and clearing.
Zar Amrolia, co-chief executive at XTX, said: “We are keen advocates of using new technology to transform market infrastructure, increasing transparency and efficiency for all participants.”
Cobalt, which also offers a service that allows customers to use its FX data for their own applications and products, added that it is opening an office in New York and revealed a series of hires.
It has named Devika Darbari, formerly a board member and Americas CEO for JDX Consulting, as chief operating officer. Darbari will also head Cobalt’s US operations.
Jon Light, former director of FX product management at Markit, and Steve Nelson, former trading support team lead at Fixnetix, have joined as head of product and head of solution delivery and support, Cobalt added.
Patten said: “The expertise these new hires bring enables us to continue to scale our business and solution, unhindered by cumbersome legacy systems and remaining agile and responsive to the needs of our customers.”