According to its website, OTCXN is the “World’s First P2P Trading Network allowing any market participant to trade with any other without credit and without counterparty risk.” In an interview with Finance Magnates’ Avi Mizrahi, OTCXN CEO Rosario M. Ingargiola said that OTCXN aims to fill the credit gap in the FX base, providing a blockchain-based “technology solution that makes it possible for anybody to trade really anything (starting, obviously, with FX) without anybody else without having to have prime brokerage involved as a requirement.”
The London-based FX market, DMALINK, is one of the first to have joined OTCXN as a provider of liquidity. “We are very excited to add DMALINK to our growing list of early adopters, which represent leading firms spanning all types of FX market participants,” said OTCXN’s Ingargiola.
DMALINK is a self-described “independent electronic trading venue for professional foreign exchange traders” that has a special focus on emerging currencies. Along with liquidity management, DMALINK also provides its clients with access to custom pricing of majors, minors, and precious metals.
The FX company seems similarly excited to enter into the partnership. Under the terms of the partnership, OTCXN’s clearing services will be used to power DMALINK’s ECN (Electronic Communication Network).
The Companies See a Win for Themselves and Clients
Michael Siwek, a founding partner and the Global Head of Sales at DMALINK, OTCXN’s “business model comes at a time of dire need.” He said that OTCXN’s “Early Adopter Program will enable us to materially impact and shape the dynamics and functionality of the OTCXN ecosystem for the benefit of buy and sell-side FX market participants.”
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Ingargiola added that “DMALINK is a prime example of an ECN who will benefit from being able to directly onboard and face clients who can’t secure Prime Broker credit, with no credit intermediary and no counterparty risk.”
Ashwind Soonarane, Managing Partner and Global Head of Liquidity Management at DMALINK, also noted that the use of a blockchain-based solution in this particular space may be particularly well-suited to address long-standing issues in the FX market: “Scalability, time-to-market, pre-trade, post-trade, counterparty risk and clearing within a fragmented credit intermediation space.”
This is just one in the series of blockchain-based partnerships that have been appearing with increasing frequency over the past year. Hopefully, companies and their clients will continue to benefit from these arrangements as blockchain continues to make moves into mainstream fintech.