Mutual Fund Giant Vanguard to Test P2P FX Trading with Blockchain
A new challenge to the $6 trillion FX market
Mutual fund giant Vanguard Group has started testing a peer-to-peer FX trading platform.
The experiment is part of a partnership with blockchain provider Symbiont. The firm sees it as an opportunity to disrupt a Forex market that sees $6 trillion in transactions every day. The partnership will target the global banks and networks that have a current stranglehold on the FX markets.
How the Vanguard Blockchain Platform Works
The new trading platform further allows asset managers to trade foreign currencies directly with one another. Therefore, the blockchain network enables them to do so without a third party like an investment bank. Bloomberg also reports that the partnership has operated for two months and has already processed trades.
Meanwhile, in a conversation with Bloomberg, Vanguard spokesperson Carolyn Wegeman discussed the project and its goal to reduce trading costs.
“Vanguard is currently piloting a project focused on improving the efficiency and reducing risk of FX hedging,” she said.
That said, it will likely require a larger number of participants to reduce costs to the point that large institutional players will migrate to the network. Simply put: Give it time.
Vanguard Group Gets Closer to Symbiont
This is the second partnership on the record between the two companies. In June 2019, Vanguard partnered with Symbiont to combine blockchain with its index data to better allocate 17 of its funds. Vanguard began using the firm’s blockchain technology in February, according to TheBlockCrypto.com.
Symbiont has generated a lot of interest as a blockchain disruptor in the financial markets. It received a $20 million investment from NASDAQ Ventures.
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