Banking Giants Set to Invest in R3-Rival & Blockchain Startup Axoni

Journalist:
Samburaj Das @sambdas
December 20, 2016

US banking giants Goldman Sachs and JPMorgan Chase are leading a number of other financial institutions to invest in blockchain startup Axoni, a report has revealed.

According to Reuters, the banks are looking to invest between $15 to $20 million in the blockchain firm. While details remain scarce, the deal itself is set to be announced sometime this week.

New York-based Axoni has provided its blockchain prototype for banks’ testing of the innovation for the financial services industry. At least one known and notable example is a months-long test where banks engaged in a smart contract enabled blockchain prototype to process over-the-counter (OTC) equity swaps earlier this year.

The four-month testing period saw Axoni’s blockchain prototype installed by banks including the likes of JPMorgan, Citi, Credit Suisse and Barclays, as well as support firms such as Thomson Reuters. The blockchain was installed and implemented either physically in the premises of the participants or over a cloud environment. 133 test cases were assessed to reveal a 100% success rate.

Axoni’s blockchain prototype has already powered several Wall Street experiments with the technology.

Meanwhile, Goldman Sachs’ investment in Axoni a month after its exit from another New York-based blockchain startup R3. Evidently, the bank picked Axoni over R3 for its blockchain endeavor. Furthermore, Goldman Sachs has also invested in Digital Asset, another blockchain firm, as a part of a $60 million investment funding round led by JPMorgan Chase earlier this year.

R3 is also reportedly dropping fundraising target from $200 million to $150 million as other banks such as Banco Santander and Morgan Stanley reportedly quit the consortium.

Axoni and R3 had jointly collaborated over a blockchain proof of concept for managing reference data of traded products earlier in September this year.

In April 2016, Axoni saw its blockchain infrastructure put to test by seven Wall Street firms for credit default swaps trading in post-trade cycles, a market that sees outstanding contracts stack up to trillions of dollars. The experiment saw a total of 85 tests which achieved a 99% success rate.

Images from Shutterstock.

Last modified (UTC): December 20, 2016 14:20

Samburaj Das @sambdas

Samburaj is the Editor for CCN, among the earliest and foremost publications covering financial and blockchain news. He has authored over 2,000 articles for CCN. Email him samburaj(@)ccn.com or find him barely tweeting @sambdas