Why we are excited to launch the first DLT trading ecosystem for corporate bonds
By the LedgerEdge team
Today marks an exciting day in the LedgerEdge journey. Our platform is now live with the UK pilot. It’s been a thrilling ride to get here. After 22 months of extraordinarily hard work and support from the team, our customers, our partners and regulators, we are now the first regulated distributed ledger trading platform for corporate bonds in the world, running at institutional speed and open for business.
It’s an incredibly important milestone for the industry. The credit markets are at a significant crossover point of digital transformation that has already come to other asset classes. We are a company that has been around for two years, but this idea has been a proof of concept for about half a decade. When we were dreaming of the institutional applications of digital technology, we knew corporate bonds were a market ripe for disruption. This is no longer a dream; there’s been a lot of hype surrounding DLT and its capabilities vs. legacy technology but this is a real-world solution and it’s live now.
A huge (but in parts massively illiquid) market, corporate bonds desperately need a transformational solution to solve the challenges of finding and promoting liquidity. On top of that, with DLT, we can address another fundamental problem, that of data ownership – which is intrinsically linked to the liquidity issue. Until LedgerEdge, the technology has not been available to facilitate pre-trade and conditional data sharing in a way that avoids unnecessarily compromising sensitive information or economic control. We believe we’ve found a way to incentivize data transparency and more data-backed trading. We are certain our end users – both on the buy-side and the sell-side – will see better opportunities and better execution.
Client engagement and feedback has been a critical part of how we built our ecosystem. They came with us on the journey, through individual conversations, working groups, and now in the onboarding journey. This is an exciting new phase in our unique and collaborative approach – the market knows that we need a system that aligns incentives and operates more effectively and logically. We want to thank those pioneering participants for being integral to our development. Our customer are the best in the world.
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.
We’re incredibly proud of what we’ve achieved so far, and our ambition is no less than being the best DLT-powered trading ecosystem in the world.