Digital Asset Holdings has raised more than US$50 million in funding from international firms, financial institutions and banks, including Citi, BNP Paribas, as well as Blythe Masters’ former employer JP Morgan, the company announced yesterday.
Other participants in the round included ABN AMRO, Accenture, Australian Securities Exchange Ltd. (ASX), Broadridge Financial Solutions, Inc., CME Ventures, Deutsche Börse Group, ICAP, Santander InnoVentures, The Depository Trust & Clearing Corporation (DTCC) and The PNC Financial Services Group, Inc.
Digital Asset also announced the addition of four new members in its Board of Directors: Catherine Flax, Head of Commodity Derivatives and Foreign Exchange & Local Markets, Americas of BNP Paribas; Ashwin Kumar, Group Head of Product Development of Deutsche Börse Group; Sanoke Viswanathan, Chief Administrative Officer of J.P. Morgan’s Corporate & Investment Bank; and Mike Bodson, President & Chief Executive Officer of DTCC.
Digital Asset, which develops tailored business applications using private, permissioned blockchains for the financial services industry, seeks to improve efficiency, security, compliance and settlement speed, as well as reduce infrastructure costs by helping financial institutions to implement blockchain technology.
ASX, a participant in a round, said it paid A$14.9 million (~US$10 million) to acquire a 5% equity interest in Digital Asset. Additionally, the public company announced in a separate release that it has selected Digital Asset to develop a blockchain-enabled post-trade solution for the Australian equity market.
The development will be split in two phases: phase 1 will run to the end of 2016 and will consist in replacing ASX’s existing trading and risk management systems; while phase 2 will focus on ASX’s post-trade services, including clearing and settlement of the cash equities market.
“The initial phase of work is designed to bring the benefits to life and to test if distributed ledged technology can work at the scale of the Australian equity market,” Elmer Funke Kupper, ASX Managing Director and CEO, said in a statement.
“By building a solution alongside the existing CHESS system, all stakeholders can participate fully in the innovation process and have confidence in the clearing and settlement processes that underpin one of the top 10 equity markets in the world.”
Back in February 2015, ASX announced that it would replace its current trading and post-trade system, known as the Clearing House Electronic Subregister System (CHESS).
According to Kupper, “there has been very little innovation in the post-trade services that operate around the world for the better part of 20 years.”
“Rather than replace CHESS with a new version that is based on the same legacy processes that operate in the market today, we should aim to re-engineer and simplify those processes to deliver significant benefits to the users of the market,” he said.
Both companies added that they would engage with Australian regulators and Government agencies to assess the benefits that a blockchain-based solution could deliver to them, as well as ensure that future post-trade solutions will meet regulatory, operational and security standards that apply to domestic financial markets.