Citigroup backs forex trading blockchain startup Cobalt DL

Rage Comment : Banks participate in blockchain R&D in different ways. Although Citibank has invested a lot of money and resources, it rarely invests in blockchain startups. Cobalt DL, a startup in London, UK, is fortunate to be an investment target of Citibank and other banking institutions. It uses blockchain distributed ledger technology to improve foreign exchange trading processes. In addition, the founder of the startup has many years of banking experience, and the CEO of Nasdaq Derivatives Market will also join the company.

Translation: Annie Xu

Citigroup has invested in Cobalt DL, a London-based startup that uses blockchain technology to simplify foreign exchange trading processes.

The founders of Cobalt DL are two experienced bankers who aim to apply distributed ledger technology to the foreign exchange market. Currently, interbank currency transactions usually involve different transaction records of buyers, sellers, brokers, clearing houses and other third parties. The verification process between different records increases costs and reduces efficiency.

The company hopes to use blockchain technology to build a single shared transaction record, using complex encryption technology to ensure the security of browsing and editing transaction information without the need for third-party involvement.

James Bindler

James Bindler, global president of Citigroup G10 FX, said in an email that “We are impressed by how Cobalt DL is reshaping the post-trading infrastructure of foreign exchange and putting distributed ledger technology into practice.”

“The Cobalt DL solution can reduce costs, lower risks and has the potential to significantly improve post-trade services.”

Cobalt DL is currently in the network testing phase and is scheduled to be released in 2017. 15 institutions are preparing to join the project, including Citi. Cobalt DL estimates that the technology can reduce transaction costs by up to 20%.

The company's founders, Andy Coyne, are senior bankers at Citigroup and Deutsche Bank, and Adrian Patten was a former exchange trader.

Coyne said:

“I decided to significantly improve the post-trade process for foreign exchange trading, removing inefficient, duplicative traditional infrastructure and processes, reducing risks and costs.”

Banks and start-ups are investing millions of pounds and considerable effort into applying blockchain technology to financial markets to reduce costs and risks.

Cobalt DL also announced that Charlotte Crosswell, former CEO of Nasdaq’s derivatives trading market NLX, will serve as a strategic advisor to the company.