OTC Exchange Network Inc. (OTCXN), a participant in Silicon Valley’s fintech and Blockchain community, today announced the closing of its Series A round of financing. OTCXN leverages Blockchain, also known as Distributed or Shared Ledger Technology, Smart Contracts, Cryptographic Multi-Signature and other related technologies in a unique, focused, total solution for global FX trading use cases.
OTCXN was established by electronic trading and e-FX technology expert Rosario M. Ingargiola, founder of FXone, where he led the design and development of one of the most comprehensive institutional FX exchange technology stacks in the market, used by global Tier-1 clients.
He commented: “OTCXN has a crystal clear value proposition – we are eliminating credit intermediation. It’s really that simple…starting with institutional FX trading. In short, we have a technological solution to the biggest problem plaguing the biggest market in the world, the FX market.”
Ingargiola explained that this “credit gap” problem is directly related to the decline in global FX trading volumes for the first time since 2001, as reported in the most recent BIS Triennial Survey.
He added: “Unlike virtually all of the firms leveraging Blockchain or DLT for capital markets use cases, real-time clearing and settlement is but one feature of our total solution instead of the core value proposition.”
Phase one of the network rollout will specifically target bank and non-bank market-makers who wish to price directly to retail brokers without prime brokerage and other intermediaries and their associated layers of cost.
This will open up entirely new markets by making it possible to onboard counterparties that do not have, or cannot obtain, prime brokerage credit lines.
Huge Cost Reductions
For firms which are able to secure credit lines through prime brokerage or through a prime-of-prime, it will greatly lower costs and increase collateral, counterparty and liquidity management options.
The company is also exploring ways to reduce capital costs for participating prime broker members while enabling them to earn prime brokerage-like fees, but without the legal and documentary overhead. Costs and risks for all counterparties will be lower for members of the network than with current incumbent systems.
Ingargiola said that the company plans to make the network offering available in NY4, LD4 and TY3. Members of the network will have a future proof, turn-key solution requiring no direct knowledge of Blockchain or other underlying technologies to benefit fully.