Citi has developed an application that uses blockchain infrastructure to price and execute bilateral spot foreign-exchange (FX) trades.
The application is a part of Project Guardian, a collaboration with the Monetary Authority of Singapore (MAS) and the wider financial industry. While the current phase of the application tested spot FX for USD/SGD, the underlying solution could be used for any fiat currency pair. The application is not currently available to clients.
Sam Hewson, head of FX sales at Citi, said, “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.”
Citi’s on-chain solution provides real-time streaming of price quotes while recording trade executions on a blockchain, which supports the immutable, cryptographically secure record-keeping of trade data. The solution also allows for compliance and conformity with institutional practices and, where applicable, regulatory requirements, with only counterparties to a quote or trade having access to the underlying trade details.
The request for streaming (RFS) application explores the use of oracles for bilateral messaging and would enable best execution analysis through real-time post-trade analysis on a single platform.
Shobhit Maini, co-head of digital assets for markets at Citi, said, “While blockchains have demonstrated promise for streamlining post-trade processes, our objective is to drive improvement at all stages of the trade life cycle, including pre-trade and execution.”
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