Vanguard Is Stepping Towards A $6 Trillion Currency Market

Vanguard Group, which revolutionized the way traders buy stocks, is now entering into a fierce competition directly with banks. Their blockchain-powered platform could steal a significant market share from the big investment banks, such as Goldman Sachs and JPMorgan Chase.

If Vanguard`s blockchain development proves to be a success, it will have the potential to shift a $6 billion per day market towards Vanguard. Skeptics are seeing investors` interest as the main challenge for the project, but with the reduced trading fees and regulatory burdens, Vanguard believes that the platform would be very appealing to potential users.

Campbell Adams, the former senior currency trader for Deutsche Bank, stated that direct trade is the Holy Grail for buying stocks or bonds. “The idea of mitigating the need for a middleman and being able to trade directly with someone is fascinating. For this move to happen, however, you would need a critical mass of users”, Adams added.

The New York-based company Symbiont developed the Vanguard FX peer-to-peer platform. The two companies partnered in exploring blockchain solutions for updating index data for Vanguard’s mutual funds.

Vanguard Group, with more than $5 trillion in assets and $2,5 trillion yearly trading volumes, is a name to consider in the financial world. Andy Maack, Vanguard’s head of foreign exchanging, stated that there is “enough interest in market disintermediation.” Maack also noted that the banking world needs a “decoupled from banks” platform with security and transparency.

Carolyn Wegemann, a spokeswoman for Vanguard, said that the company is piloting such a project, aimed at improving the efficiency of financial operations. “This project is part of our obligation to users for lowering investment costs for all investors,” Wegemann added.

If the blockchain-powered project comes to life, it would be one of the most significant cases of blockchain implementation in modern finance. Large financial institutions like JPMorgan and Banco Santander SA have been experimenting with blockchain for years. JPMorgan have already launched a trial of their digital currency, the JPMCoin, and Banco Santander issued tokenized debts.

Vanguard’s peer-to-peer platform will also make an impact on swaps and forward markets, apart from spot trading. “On a daily basis, investment interest can change, and this is a limitation in spot trading,” Campbell Adams commented.