The Vanguard Group, one of the world’s largest investment companies, has begun testing the use of blockchain technology in FX trading. It has been reported by Bloomberg that Vanguard has partnered with Symbiont, a blockchain technology provider, to create an FX trading platform that allows for peer-to-peer FX trading. Blockchains have had a growing presence in the foreign exchange market as it is a faster, more efficient, and more reliable way of transferring funds. If successful, the Vanguard-Symbiont partnership could challenge client-bank relationships as it will help alleviate corporate clients of the high markups and costs associated with FX transactions. Additionally, the platform would make it easier for corporate clients to exchange foreign currencies.
While there are still uncertainties with the platform, which has few users so far, the partnership seems promising. Regardless, the Vanguard-Symbiont partnership signifies the digital change occurring within the banking industry. As banks begin to modernize and technology advances, there will be a pressure to monitor and lower excessive FX markups. Until FX costs and markups decrease, FX Rate Integrity® is there to address the issue of Excessive FX Markups.
Read more on Bloomberg.