ICAP, the world's largest trader and broker, announces the use of blockchain technology

Rage Review : ICAP is the world's largest trader and brokerage firm, providing clients with bond, currency and swap trading pairings. Blockchain is essentially a distributed ledger, and its open source and immutability make it an ideal means of data recording and tracking. The application of blockchain in the financial industry may subvert the industry's operating model and bring about rapid development prospects. ICAP is optimistic about the potential of blockchain and announced that it will take the lead in using Bitcoin blockchain technology to provide transaction data support to clients. Mark Carney, Chairman of the Global Financial Stability Board and Governor of the Bank of England, also believes that the government should take measures as soon as possible to welcome the arrival of this disruptive technology.

Translation: Annie Xu

ICAP, a firm that matches both sides of bond, currency and swap transactions, has announced it is taking the lead in using bitcoin blockchain technology to provide trading data to clients.

Blockchain, or distributed ledger technology, is used to create a shared database where participants can track every transaction. Proponents of blockchain see it as having the potential to disrupt the way financial markets operate.

The new technology for the internet finance industry has attracted the attention of regulators as major banks have invested in blockchain infrastructure for key markets, including securities settlement, bond trading and cross-border payments.

ICAP said it has used blockchain to provide clients with “golden source” data for regulatory reporting and to protect against transaction risks, such as issuing a certain amount of cash or collateral at a clearing house.

ICAP said:

In a “proof of technology” exercise last month, foreign exchange trading data was released to nine participating companies via blockchain.

Banks can use golden source data to meet the needs of different customers, saving the cost of intermediate links and back-end functions. There is no need to repeatedly verify the transactions corresponding to each application in the system.

ICAP Post Trade Risk and Information Services CEO: Jenny Knott

Jenny Knott, CEO of ICAP’s Post-Trade Risk and Information division, said:

“I believe ICAP is the first company to use blockchain and distributed ledger technology in this space.”

“The real shift is that banks no longer have to handle so much of this themselves.”

Banks can only access their own transaction information in the ledger.

ICAP said it was possible to expand the distributed ledger system to cover all transactions, and the reliability of the data would give banks the confidence to shut down their in-house technology systems.

Jenny Knott says:

“What we are doing now is developing parallel technologies with our partners to add different assets and transaction categories.”

Mark Carney, Governor of the Bank of England

The Financial Stability Board is chaired by Bank of England Governor Mark Carney, and last month the regulator announced it was looking forward to the application of Internet financial innovations such as blockchain in financial markets.

Although the technology currently has little effect, policymakers hope to prepare early to prevent potential systemic risks from large-scale operations in the future.