Wall Street Disintermediation Arrives as Hedge Fund Trades P2P Via Blockchain, Without a Bank or Broker
US, May 10, 2016 at 14:13 UTC
New York: Brooklyn-based technology outfit, Veritaseum, has enabled a hedge fund to be the first to trade actual traditional capital markets value peer-to-peer through the blockchain, completely circumventing Wall Street banks and brokers and the fees that they entail.
According to Veritaseum founder, Reggie Middleton, "We were the first to create a fully functional smart contract application for capital markets. We were the first to clear such a product through the blockchain, and we're confident that we were the first to identify distinct intellectual property surrounding this space - over two years ago. We are now quite proud to be the first to announce actual trading of value using blockchain smart contracts by hedge funds, one of the most profitable clients of Wall Street banks, sans the Wall Street banks!"
Veritaseum's public blockchain-based value trading platform intelligently replicates the functionality of legacy industry swaps on a fully autonomous basis with greater safety, flexibility and transparency - all at a dramatically lower cost to the fund. Veritaseum smart contracts are essentially without counterparty and credit risk. They clear within minutes, with privacy to the end user, and offer a tradeable universe of over 45,000 tickers in all asset classes across all major geographic bourses. This is done without the end user ever using or coming into contact with a bank or a broker. There is no conventional custodian of assets in a P2P system - including Veritaseum, itself. Mr. Middleton adds "We are solely a software and consulting company and our clients have no balance sheet exposure to us whatsoever. We hold no capital - yet we enable all of our clients to become their own investment banks and prime brokers. It's already a very different world than what the legacy players in this space are accustomed to."
"Of course, like many who are new to this [blockchain] technology, we were skeptical of the claims being made." says Catalyst Managing Partner Ward Corbett. "After being walked through the Veritaseum's capabilities, its potential becomes crystal clear to anyone paying attention. We are able to synthetically short European banks with the USDEUR pair or go long Google equity exposure by paying oil exposure. All in all, we can essentially custom design any bespoke exposure we can envision, literally in minutes."
"The goal of Veritaseum is to 'Googlify' the financial sector" Middleton adds. "Veritaseum is to finance as Google is to media and advertising. Investment bank compensation in the investment management sector is about 57% of revenues as of last quarter. Compare that to Google's numbers which we calculate to be closer to 25%. That's a significant difference, returning tens of billion in Wall Street compensation to prime brokerage clients, we anticipate a bright future for Veritaseum and client-centric (in lieu of bank-centric) blockchain services."
Veritaseum is building a consortium of fund clients for trading P2P through the blockchain, similar to how R3 is building a consortium for banks that serve these funds. Bank clients are trading real value through the blockchain, now. The consortium is just getting started, but management plans to onboard 50 funds over the next 90 days.
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