T Skevington and M Bacina
Vanguard hedges bets and partners with startup to develop blockchain trading platform
Massive investment management company Vanguard has partnered with Nasdaq Ventures-backed blockchain startup Symbiont to develop a trading platform to lower transaction costs in the $6 trillion currency market. After creating the first index fund in 1975, now with assets under management (AUM) in excess of $5 trillion, any costs savings afforded by implementing blockchain technology will have significant value for Vanguard.
While this latest project partnership has gone public, details are still few and far between. Company spokeswoman Carolyn Wegemann is reported to have said:
Vanguard is currently piloting a project focused on improving the efficiency and reducing risk of FX hedging.
This latest partnership follows earlier collaborations between Vanguard and Symbiont.
In early 2019, Vanguard announced that it had been using a blockchain product developed by Symbiont to ingest data for $1.3 trillion worth of funds, or one quarter of its total Assets Under Management.
Symbiont is a six-year-old New York startup with over 70 employees. Symbiont’s products aim to serve different functions for financial institutions, ranging from tracking the full life cycle of a mortgage security to settling securities trades.
The deployment of blockchain technology to improve existing trading and provide more open systems to verify and reconcile trading is a significant use-case, one being pursued in Australia by the Australian Stock Exchange with their CHESS replacement project.