The Vanguard Group, a registered investment advisor headquartered in Malvern, Pennsylvania with more than $5.3 trillion in assets under management, has teamed up with Symbiont, a crypto startup backed by Nasdaq Ventures to develop a trading platform for the $6 trillion currency market.
Lowering Transaction Costs
With the new platform, Vanguard, aims to lower transaction costs for the trillions of dollars’ worth of currencies it trades annually by boosting peer-to-peer trading for investors, connecting them directly via blockchain technology, without involving banks as intermediaries. This would be a major disruption in the currency market which is currently dominated by banking giants JPMorgan and Citi Group.
Symbiont CEO Mark Smith said that the company partnered with Vanguard in order to build the currency platform. The trading platform was launched two months ago and conducted its first trades during the time.
Vanguard is already testing the blockchain-powered platform for two months over a few successful trades. The platform uses the same trade matching pattern as seen in the Bitcoin blockchain.
Direct trading benefits greatly for the buy-side. You can reduce your costs if you can match directly with someone else who has a countervailing interest, but a platform like this need a critical mass of users who can bring a discount advantage to this massive sector.
The new platform is part of the fund manager’s commitment to lowering the cost of investing for all investors, the spokesperson said. Neither company would provide further details of the pilot.
New York-based Symbiont and Vanguard have previously worked with each other for the latter’s index funds project. Symbiont provided Vanguard with its patented smart contract technology to streamline its index fund data collection process.
The blockchain firm is focused on its smart contracts platform for institutional applications of its blockchain platform Symbiont Assembly to help build networks where multiple independent entities can share data and logic in real time.
Earlier Series Funding
In January, Symbiont raised a $20 million Series B funding round led by Nasdaq Ventures, with other investors in the round including Galaxy Digital, Citi and Raptor Group. Till date, the startup has raised a combined $15.4 million from a seed round in 2014 and Series A in 2017. Earlier investors include the blockchain arm of retail giant Overstock and a Chinese software firm Hundsun Technologies, backed by Alibaba CEO Jack Ma.