Citi has developed an app in which blockchain is used to make execute foreign exchange (FX) trades.
This tool uses blockchain infrastructure to solve tasks such as determining prices and conducting bilateral spot currency financial operations. This solution was developed for the Monetary Authority of Singapore’s (MAS) Project Guardian, a collaborative initiative by the MAS and the financial industry.
So far, the new app is not available to customers. During the testing of the instrument, transactions were made with the US dollar and the Singapore dollar. At the same time, Citi’s press release notes that any fiat currency pairs can be used as part of the solution.
The financial institution also stated that the offer tool provides streaming of price quotes in real-time when recording the execution of transactions on the blockchain, which supports immutable cryptographically secure accounting of trading data.
Citi’s press release separately states that only counterparties to a quote or transaction have access to basic trading details. Shobhit Maini, the bank’s co-head of digital assets for markets, says that blockchains have shown promising results in optimizing post-trading processes. According to him, the goal of the financial institution is to ensure improvements at all stages of the transaction life cycle, including pre-trading and execution.
Citi developed the app together with T. Rowe Price Associates and Fidelity International. Blue Macellari, head of digital asset strategy at T. Rowe Price, described the development of user-friendly execution at the institutional level as the key to future scalability. According to her, the mentioned app is an important first step towards revealing the value of the full life cycle of blockchain-based trading.
Project Guardian follows another initiative that MAS took part in, called Project Mariana. In this case, within the framework of cooperation with the Bank for International Settlements and the central banks of France and Switzerland, wholesale CBDCs were tested. Following the results of the mentioned activities, the project participants stated that the advantages of this currency are to support simple and automated execution of transactions, provide expansion opportunities, ensure transparency and eliminate settlement risks.
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