Citi has invested an undisclosed sum in Cobalt DL, a foreign exchange post-trade processing network based on blockchain technology.

Cobalt DL has begun beta testing with a number of FX participants on its private peer-to-peer network that uses distributed ledger technology to reduce risk and cut post-trade costs by up to 80 per cent. Cobalt DL’s FX solution is set to launch in 2017.

From a single transaction, existing infrastructure creates multiple trade records for buyers, sellers, brokers, clearers and third parties. By creating a single, shared view of a transaction, Cobalt DL aims to free up back and middle office resources that are currently overwhelmed by the need for continuous reconciliation across multiple systems.

James Bindler, global head of G10 FX at Citi, said: “We have been impressed with the way Cobalt DL is redesigning the post-trade FX infrastructure with its practical implementation of distributed ledger technology. The Cobalt DL solution has the potential to significantly improve post-trade services by cutting costs and reducing risk for our industry.”

Andy Coyne, co-founder of Cobalt DL, added: “We have set out to radically improve the FX post-trade landscape by removing inefficiencies, duplicative legacy infrastructure and processes, as well as reducing significant costs and risks. As we stand at a point of change for the FX post-trade landscape, we are delighted to welcome Citi as one of our investors and as an active market participant when we go live.”

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