Markets

Blockchain startup Cobalt nabs investment from the Singapore Exchange

Cobalt, a London-based startup which is aiming to shift foreign exchange (FX) markets onto blockchain technology, now has Asia's largest currencies exchange on board.

The Singapore Exchange (SGX) today made a "strategic investment" in Cobalt, which aims to use distributed ledger technology (the tech behind bitcoin and blockchain) to improve firms' infrastructure and risk management.

SGX joins major FX trading bank Citigroup as an investor in Cobalt, which is currently testing a beta project with more than 30 institutions including Citi and Citadel Securities.

Read more: Lagarde warns of blockchain disruption to clearing and settlement sectors

"SGXs investment is testament to our innovative application of technology in the FX space," said Adrian Patten, co-founder and chairman of Cobalt.

"Our platform addresses pain points faced by almost every institution that trades FX: the unnecessary cost and risk associated with post-trade processing."

Distributed ledger technology works by keeping a record of transactions on every computer which is part of the network. Each transaction gets verified by algorithms, and once recorded is unchangeable and unremoveable.

Read more: British Gas owner Centrica is exploring blockchain tech with a new UK trial

Financial institutions are hoping that this kind of technology will help them cut costs in the long run, minimising the need for middle men and improving the audit trail so that data can instantly be accessed by any party which is given authority.

Former Deutsche Bank chief operating officer Henry Ritchotte, who is acting as a strategic advisor to Cobalt, added: "Exchanges around the world continue to invest in the critical infrastructure underpinning financial markets.

"This collaboration between a major Asian exchange and an innovative firm that has developed a unique high performance, distributed ledger technology solution is a major step forward in upgrading the systems our industry relies on to operate efficiently, safely and cost-effectively."

Read more: Moody's: British banks system among most at risk from blockchain disruption

Leave a Reply