Today State Street Digital announced that it was involved in a transaction that uses Symbiont’s Assembly enterprise blockchain to complete margin calculations for a live foreign exchange forward contract. Vanguard has been working with Symbiont to develop a post-trade automation platform for the over the counter (OTC) foreign exchange derivatives market. This transaction marks its transition from pilot to production.
According to the BIS, at the end of June 2021, the OTC market for forex derivatives contracts had a notional value of $102 trillion, of which $55 trillion are outright forwards and forex swaps, the area on which Vanguard’s platform focuses.
By automating the margin assessments, the calculations can be made more regularly. If the movement of collateral used to support the margin requirements also happens automatically together, this can significantly reduce counterparty risks.
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