LedgerEdge has announced a regulated bond trading platform that utilizes distributed ledger technology (DLT or blockchain). LedgerEdge has selected Corda’s R3 permissioned blockchain to power the trading platform. LedgerEdge shares that it is targeting the $41 trillion global corporate bond market, much of which is still conducted by phone.
LedgerEdge reports that it is regulated by the UK Financial Conduct Authority as a Multilateral Trading Facility (MTF). LedgerEdge has partnered with leading global banks, asset managers, and market makers to launched the marketplace. The system is operational with 45 firms in the UK MTF and 70 globally that are either trading on the platform or in the onboarding process. These are said to include seven out of the top 10 sell-side dealers as well as more than 30 major asset managers.
Trading is ongoing with liquidity growing as more participants join the ecosystem. LedgerEdge states that it has received postivie feedback from the market with 30 percent of traders in The DESK’s Trading Intentions Survey 2022 indicating they intend to use LedgerEdge to execute corporate bond trades this year.
David Nicol, CEO and co-founder of LedgerEdge, commented:
“The first fully regulated bond trading platform built on distributed ledger technology is an important milestone for the industry. Credit markets are on the cusp of a digital transformation that has come to other asset classes, and we are excited to be at the forefront in this important market. Client feedback has been an instrumental part of how we built our ecosystem, and I want to thank key participants for being integral to our development. I look forward to continuing that collaborative approach as volume grows and we continue to develop the product. We are bringing a new, modern ecosystem that emphasizes control and ease of execution to a historically illiquid market.”
David Rutter, co-founder of LedgerEdge, called the announcement a momentous step for the company:
“This is the culmination of pioneering ideas, work, and important client engagement. Our ambitions have now been realized as we bring a next-generation platform to market that fundamentally solves the challenges of locating and promoting liquidity and data ownership. The decentralized system we built gives us the opportunity to rewrite the architecture in the bond market, and corporate bonds are just the beginning.”
In a blog post, the LedgerEdge team shared that corporate bonds desperately need a transformational solution – and they are providing it:
“We will continue to collaborate as volume grows and we develop the product, and expand into further jurisdictions in the US, Europe and beyond. Our team have spent their careers steeped in electronic fixed income markets and we know the potential for new technology, like DLT, to improve market structure is immense – and only just beginning. Who knows what the future will bring beyond credit? Things are looking interesting and platforms such as ours are ready to support the exciting growth of electronification across asset classes and digital systems of records. With our smart contract capability, we can help expand into new institutional markets which compliance, regulation, and certainty of results. Working with the very best customers in the business, we are seeing the birth of digitization of markets at the institutional end of the spectrum.”