Citi unveils blockchain-based FX solution
15 October 2023 Singapore
Image: Tasphong/stock.adobe.com
Citi has developed a bilateral spot foreign exchange (FX) trade pricing and execution application using blockchain infrastructure as part of the Monetary Authority of Singapore’s (MAS) Project Guardian initiative.
The request-for-streaming (RFS) solution offers real-time streaming of price quotes, with trade executions recorded on a blockchain. This allows for secure record-keeping of trade data, conformity with industry practices and regulatory compliance, with only counterparties to a quote or trade having access to the underlying details of a trade.
A private permissioned version of the Avalanche blockchain was used to capture price quotes and trade confirmations for each counterparty. Citi also explored the use of oracles for bilateral messaging in its tests of the application.
Initial tests of the application used spot FX for USD/SDG, with Citi affirming that the underlying application can be used for any fiat currency pair. While the application is not currently available to clients, Citi hopes that it will serve as an “important first step towards unlocking the value of a full end-to-end, blockchain-based trading lifecycle”.
Project Guardian is an initiative led by MAS, with the collaboration of several financial industry bodies.
Sam Hewson, head of FX sales at Citi, says: “We are taking steps towards building foundational capabilities to offer liquidity pricing and risk management to our global clients wherever they choose to trade—be it on traditional rails or on blockchain.”
Shobhit Maini, co-head of digital assets for markets at Citi, comments: “While blockchains have demonstrated promise for streamlining post-trade processes, our objective is to drive improvement at all stages of the trade lifecycle, including pre-trade and execution.”
The request-for-streaming (RFS) solution offers real-time streaming of price quotes, with trade executions recorded on a blockchain. This allows for secure record-keeping of trade data, conformity with industry practices and regulatory compliance, with only counterparties to a quote or trade having access to the underlying details of a trade.
A private permissioned version of the Avalanche blockchain was used to capture price quotes and trade confirmations for each counterparty. Citi also explored the use of oracles for bilateral messaging in its tests of the application.
Initial tests of the application used spot FX for USD/SDG, with Citi affirming that the underlying application can be used for any fiat currency pair. While the application is not currently available to clients, Citi hopes that it will serve as an “important first step towards unlocking the value of a full end-to-end, blockchain-based trading lifecycle”.
Project Guardian is an initiative led by MAS, with the collaboration of several financial industry bodies.
Sam Hewson, head of FX sales at Citi, says: “We are taking steps towards building foundational capabilities to offer liquidity pricing and risk management to our global clients wherever they choose to trade—be it on traditional rails or on blockchain.”
Shobhit Maini, co-head of digital assets for markets at Citi, comments: “While blockchains have demonstrated promise for streamlining post-trade processes, our objective is to drive improvement at all stages of the trade lifecycle, including pre-trade and execution.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
