Fintech trust company itBit is opening up offices in London to help bring its Bankchain distributed ledger platform to market. The company has hired former Societe Generale post-trade expert Jason Nabi to head itBit's EMEA division. Nabi is also an advisor to the UK-based Post-Trade Distributed Ledger Working Group.
Last year itBit said the initial focus of the Bankchain project would be providing a blockchain platform for the gold and precious metals marketplace, and that the project had signed ten memoranda of understanding with a range of custody banks and players in the gold market.
Being a trust company gives itBit some real regulatory clout in the state of New York, where it is set up as a regulated custodian. Nabi said Bankchain is now in negotiations with players in the London gold market.
He told IBTimes: "We are working closely with the London gold market, speaking to people who trade gold, or are vault operators in gold market. We see a real opportunity to leverage Bankchain to enable true DVP and full inventory control."
However, he said gold is just the first use case of Bankchain here in London with a range of other use cases and applications to follow in post-trade securities and other areas of capital markets.
"We are focused on becoming a market enabler rather than just a tech enabler," said Nabi. "That's the difference between Bankchain and other blockchain operators today. We are focused on bringing together people who have worked in the post-trade and market infrastructure landscape, to bring those experts together with blockchain engineers."
This is a happy coincidence apropos Nabi's position as an advisor to the London-based Post Trade Distributed Ledger (PTDL) project, a think tank bringing together a number of stakeholders within the post-trade arena. Its members include the London Stock Exchange, CME and a host of other banks, clearing houses and infrastructure providers. Not a great deal is known about the PTDL group, which is being co-ordinated by Brian Mcnulty, a partner in trading consultancy DBFS.
Nabi said: "It's been an interesting opportunity to work with quite a large cross section of the industry. We set up PTDL with help of Brian Mcnulty back in late summer of 2015. We really wanted a body that could represent the post-trade industry and discuss all manner of items that were relevant in post trade: I'm talking about custodian banks, clearing banks, market infrastructure players, exchanges. We had quite a large take up on the PTDL, which has demonstrated the interest and commitment within the post-trade landscape to look at how blockchain will shape it."
While he was global head of post-trade at Societe Generale, Nabi got together with a couple of colleagues from Northern Trust, the LSE and CME, and with Mcnulty decided to bring the PTDL together as a forum to discuss the opportunities around blockchain.
"There was a lot of talk at the time about R3, but R3 is really more of a bank-driven commercial venture. Apparently they have opened their doors to exchanges - and i think that's a good move by R3. I'm still curious as to what the real objective and real deliverable from R3 is likely to be. It's not just me. I think a number of people are curious about what R3 really is doing, or trying to do.
"From a post trade perspective, we felt it necessary to have more of an independent voice from R3 to look at what specifically was likely to change and develop in the post trade world, with market infrastructure participation, and clearly at the time R3 wasn't the vehicle to do that. It's still not quite the vehicle to do that.
"Of course I should add, now that I have moved across from a bank providing clearing and settlement services to itBit, I'm hoping that the PTDL continues to develop and opens its doors to the likes of itBit, so iBit can get more involved in the discussion on the developing post trade landscape.
"I think as we become more of a core partner to market infrastructure and we bring Bankchain to market, we will effectively support the next generation of post-trade. If you think about Bankchain - and there are others out there doing their own thing – we are an interoperable platform for settlements, leveraging permissioned distributed ledgers for certain assets class and markets. We will do that in some cases with leading market infrastructure players - or indeed in some cases on a user-driven basis. In both instances Bankchain will be at the core."
The PTDL group itself will not be producing any code or building anything, but any project with the staunch backing of the London Stock Exchange has to be taken seriously – some people may have even assumed the group was actually convened by the LSE.
"I think a few people thought that originally," said Nabi. "Moiz Kohari [VP, Advanced Platforms Engineering, LSE] has been one of the key voices on the PTDL. He's a real leading figure for the industry."
Looking to the future Nabi said: "There is so much to do and develop and change in capital markets: the various asset classes that are traded and settled, the various geographies and markets. Think about the extent and the constraints of all of those legacy systems and processes in post trade - so everything from the back office through to the clearing and the settlement layers, across all of those asset classes and regions.
"There's a huge amount of work to do over the next five, eight, 10 years. No one player is going to be the single answer or the single solution for all of it."
In terms of a likely location for the London itBit office, he added: "Chad [Cascarilla, CEO and co-founder of itBit] and I like the area just around London Bridge."