Cobalt and DeFinity Team Up for Real-Time FX and Digital Asset Clearing
Posted by Colin Lambert. Last updated: December 21, 2021
Digital asset ECN and DeFi marketplace for fiat FX, cryptocurrencies and central bank digital currencies, DeFinity, has unveiled a partnership with market infrastructure provider Cobalt, to focus on re-engineering the institutional FX and digital asset markets to facilitate real-time clearing, settlement and dynamic risk and credit management.
“Currently digital assets are at the identical point of evolution that fiat FX was in the 1980’s with large bid/offer spreads, an absence of standardisation, insufficient segregation of duties, combined with inefficient and fragmented liquidity, which introduces far greater operational and systemic risk for participants,” says Manu Choudhary, CEO and co-founder of DeFinity. “The partnership provides an enterprise solution for digital assets to interact with traditional FX counterparties with roles throughout the execution lifecycle – custody, execution, clearing, and settlement – clearly defined.
“Our vision to establish DeFinity as a leading ECN delivering sustainable and non-fragmented digital asset liquidity to market participants is hugely enhanced by our partnership with Cobalt, not only because of their revolutionary clearing infrastructure, but due to the fact that some of the world’s largest banks and funds are already clients and investors,” he continues. “The asset custody or credit intermediation functions are kept at arms-length with trustworthy counterparties as inspired by the best practices of the global currency markets.”
Darren Coote, CEO of Cobalt, adds, “A significant number of financial institutions are eager to capitalise on the cryptocurrency expansion, but the lack of institutional-grade infrastructure limits investment opportunities. The prevailing settlement process is extremely manual, open to significant risks, and not adequate for institutional trading. Cobalt is one of the only firms providing critical market infrastructure in both digital assets and FX and our partnership with DeFinity will help to distribute our post trade solution to a broader demographic of institutional traders.”
The firms say their combined technology will enable clients to leverage the processes of capital markets for digital asset trading, creating a secure technical infrastructure by maintaining the legal confirmation of each transaction. DeFinity will allow institutional investors to retain independent custody pre-trade while providing a consolidated view of fiat and digital asset positions.
“Institutional clients are excited to use our infrastructure to transact, record and settle trades efficiently utilising our proprietary blockchain to increase transparency and TCA capabilities, therefore boosting investor confidence materially,” says Michael Siwek, chief revenue officer and co-founder of DeFinity Markets.
The two firms add they are also jointly collaborating on further products and services, with shared synergies across a number of areas of innovation.