Bosonic’s CCNS Settles First Trade
Posted by Colin Lambert. Last updated: December 12, 2022
Bosonic’s Cross Custodian Net Settlement (CCNS) solution has settled its first trades the firm says.
The solution, which was first announced in June 2022 and enables custodians to net settle on behalf of their clients (assuming they are either trading on the Bosonic Network, or trading on other digital asset venues that are using Bosonic Enterprise for clearing and settlement and connecting to CCNS), says trades in USDC and ETH were executed, cleared and settled atomically between two digital asset custodians, First Digital in Hong Kong and Propine in Singapore.
“This is a pivotal moment in the industry where CCNS will effectively eliminate counterparty credit and settlement risk in digital asset markets with atomic exchange, both trader-trader in real-time, and now custodian-to-custodian for net settlement movements,” says Rosario Ingargiola, CEO of Bosonic. “We’ve been building CCNS for some time and have been looking forward to going live with custodians who are pleased to partner with us on this milestone event. Our vision has always been to remove friction and risk in digital assets, and this is even more important than ever before.”
Tuhina Singh, CEO Propine, adds, “Whatever activity you do with digital assets, it starts from a place where they are securely stored and can be safely transferred. A licensed, institutional-grade custodian is thus a prerequisite for crafting a digital assets strategy. Partnering with a licensed service provider is critical, as it provides the necessary investor protection and recourse, as both regulatory and contractual obligations, in case things go wrong, as they sometimes do. The CCNS network, connecting the custodians globally, provides a necessary layer of infrastructure, absolutely crucial to realising the full potential of, what is essentially and natively, a global asset class.”
On CCNS custodians load digital assets that need to be physically delivered between custodians in a Smart Contract on Layer-1 public blockchain protocols. Both the institutional clients and the custodians eliminate counterparty credit and settlement risk, reduce their intraday exposures, and improve balance sheet efficiency, addressing the key issues that are inherent in today’s operating model in the industry, Bosonic says.
“Digital asset custodians will have a crucial role to play in the next 6-12 months, especially given the state of the market now with trust being eroded in CEX’s,” observes Vincent Chok, CEO of First Digital. “Going forward, we will see players increasingly rely on qualified custodians, the best of which will dominate market share. Institutional investors, now more than ever, will pay closer attention to security and fund segregation. A key driver for digital asset custodians looking to build a sustainable business model is enabling next-generation security, which means incorporating multi-sig, sharding and multi-party computation. When it comes to traditional institutions with large amounts of money and their reputation at risk, having military-grade online and offline security protocols, stringent Anti-Money Laundering and KYC requirements plus client asset segregation is critical.”