U.S. bank Citi has adopted blockchain project Cobalt DL ahead of what the organization expects will be a second round of capital next year. Citi’s support is the latest step forward for Cobalt, seen by business players as one of few latest initiatives in this region to carry promised savings on processing currency deals. Citi is the single biggest dealer of currencies worldwide and is also involved in a number of other moves that aim to cut the cost of settlement, credit and execution in the $5 trillion a day foreign exchange market. The size of Citi’s investment in Cobalt was not revealed.
Blockchain, also known as distributed ledger technology, works as a web-based transaction-processing and settlement system. It build a record of any given set of data that is automatically replicated for all parties in a secure network, wiping out any need for central authorization. Foreign exchange trades directly need multiple records for buyer, seller, broker, clearer and third parties and then agreement across multiple operations. Citi’s Global Head of G10 FX, James Bindler said “we have been impressed with the way Cobalt DL is redesigning the post-trade FX infrastructure with its practical implementation of distributed ledger technology”.
The Cobalt DL solution has the potential to necessarily develop post-trade services by reducing expenses and decreasing harm for the business. Cobalt also said former Nasdaq executive and City of London veteran Charlotte Crosswell had joined the firm as an adviser to help to forge partnerships and that it expected to bring in more investors next year.