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Mutual funds giant Vanguard has entered into a partnership with Nasdaq Ventures-backed blockchain startup Symbiont to create a trading platform for the $6 trillion currency market.
The platform aims to leverage the blockchain-powered peer-to-peer trading for investors to enable asset managers to trade currencies without involving banks as intermediaries. Furthermore, the move will also allow Vanguard to reduce its transaction costs for trillions of dollars of currency traded annually.
According to Bloomberg, the firm has already been trialing the platform for 2 months and has tested several successful trades. The platform will utilize the same trade matching pattern as the Bitcoin blockchain.
However, although there are currently no specific details on the development of the platform, the company said that its main goal is to lower investment cost and currency hedging.
“Vanguard is currently piloting a project focused on improving the efficiency and reducing risk of FX hedging. Given the project is still in the pilot stage, we can’t comment further,” Vanguard representative Carolyn Wegemann told Business Insider.
Notably, Vanguard’s recent move would potentially see a major commotion in the currency market, which is dominated by banking giants JPMorgan and Citi Group.
This is not the first time the two companies have worked together. Symbiont and Vanguard previously teamed up for the latter’s index funds project, where Symbiont provided Vanguard with its patented smart contract technology to streamline its index fund data collection process.
Meanwhile, Symbiont secured $20 million in Series B funding round led by Nasdaq Ventures earlier this year. As previously reported, the capital was allocated to expand its team and accelerate deployments across multiple business verticals including data management, mortgages, private equity, and syndicated loans.
