T. Rowe Price and other investment firms have started experimenting with blockchain-based trade execution through Ava Labs’ Spruce.
There’s a renewed push on Wall Street to collaboratively test how blockchain technology could make financial transactions more efficient, in a low-risk way.
There’s a new project among a group of investment management firms to test the benefits of blockchain-based trade execution and settlement.
T. Rowe Price, Cumberland, WisdomTree, and Wellington Management Group have kicked off an experiment to use Ava Labs’ Avalanche Evergreen Subnet “Spruce” to execute foreign exchange and interest rate swaps. This joint effort between stakeholders is noteworthy, as institutional blockchain efforts have often not been interoperable.
Spruce purports to reduce costs and cut down on counterparty risk through simultaneous and instant settlement, permissioning based on know-your-customer certifications, geofencing, custom gas token selection, and more.
“These features have been tailored to financial institutions’ needs after in-depth discussions with industry leaders on their prior challenges regarding broader public blockchain adoption,” Ava Labs director of business development for institutions and capital markets, Morgan Krupetsky, told Insights Distilled.
The test project, which involves valueless tokens, “is an opportunity for us to really begin to explore … in a super low-risk environment, where there’s no capital at risk,” T. Rowe Price’s head of digital assets strategy, Blue Macellari, told Bloomberg.
While the heyday of financial firms’ blockchain projects has faded, the comparative lack of hype actually makes it a good time for education, experimentation, and partnerships.