Today OSTTRA announced it will launch an FX PvP settlement service powered by Baton Systems’ Core FX DLT solution. OSTTRA is the post trade joint venture between S&P Global and CME Group.
The Committee on Payments and Market Infrastructures (CPMI) has repeatedly highlighted FX settlement risks. A significant portion of foreign exchange (FX) transactions, estimated at $2.2 trillion daily, are settled outside of CLS. To reduce risks, the CPMI has been encouraging greater adoption of payment versus payment (PvP) solutions, which ensure both sides of a transaction settle simultaneously.
Many new solutions offering PvP use distributed ledger technology but have yet to be launched or are unproven. However, Baton’s Core FX has achieved traction, with HSBC and Wells Fargo accounting for a large proportion of activity. The two banks will join the OSTTRA-operated service in the first half of this year.
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