US-based Investment advisor group Vanguard is testing a blockchain platform that will allow the trading of currencies without the involvement of big investment banks, reported Bloomberg, citing a source familiar with the matter.
With the cost-saving benefits, Vanguard aims to disrupt the $6 trillion a day currency market that banks such as JPMorgan Chase & Co. and Deutsche Bank AG have “ruled for decades”. Former senior currency trader at Deutsche Bank Campbell Adams highlighted that for disruption, the platform will have to reach “a critical mass of users”.
The Vanguard FX platform uses blockchain technology developed by New York-based Symbiont, a smart contracts platform for institutional applications of blockchain technology. Earlier, Vanguard had already teamed up with this company to explore blockchain applications for updating the index data behind its mutual funds.
Also last month, the global head of Vanguard FX trading, Andy Maack, indicated that there is a “tremendous amount of interest in the potential for disintermediation”, and the company aims to create a system that would be “decoupled from banks”.