U.K.-based Global Markets Exchange Group (GMEX Group) has announced the integration of uClear, a real-time clearing and settlement platform that uses blockchain technology.
Launched today, uClear is a product of uTrade Solutions, based in India, that enables real-time clearing and settlement of contracts across the cash and derivatives segments of the financial markets.
Built on Multichain, the solution is aimed at exchanges and trading venues, allowing them to clear trades post execution more efficiently through a private blockchain. uClear comes integrated with a set of features that includes real-time risk management, report and transfer instruction generation.
The release of the platform comes at a time when interest in blockchain technology is growing fast among Indian banks and IT companies. In May, Livemint reported that Axis Bank Ltd. has been “aggressively” looking at blockchain technology. In April, EdgeVerve, a subsidiary of India’s second largest IT services company Infosys, launched the EdgeVerve Blockchain Framework, a permissioned ledger that allows banks to deploy blockchain-enabled solutions for varied business areas such as trade finance, inter-entity payments, secure store of documents and smart contract infrastructure.
Kunal Nandwani, co-founder and CEO of uTrade Solutions, qualified the blockchain as a “very powerful technology that will dramatically change the way the financial services industry operates.”
He said in a statement on Wednesday that discussing the technology today “is like discussing the Internet in 1996. There was lot of hype, a mix of potential and skepticism. Eventually the Internet did change our lives for the better. The same is what we foresee with blockchain.”
Nandwani pointed out that adoption of such a disruptive technology will take a few years, notably due to regulation, legacy infrastructure replacement challenges, and “unwillingness to accept transparency.”
“However to the contrary, transparency is the most discernable benefit of the blockchain distributed ledger as transactions can be cryptographically proved,” he said.
GMEX Group is an exchange technology provider and an operator of electronic exchanges across multiple asset classes in a number of markets. The company said it will integrate uClear in July 2016 through its GMEX Technology subsidiary.
GMEX Group’s CEO, Hirander Misra, said that the integration of uClear is in line with his company’s focus on fintech innovation. He said that GMEX Tech is currently exploring a hybrid model that would support existing workflows across the company’s exchange, clearing house, depository and warehouse receipts product suite.
[Blockchain innovation] helps both GMEX Group and our exchange clients to adapt in an era of rapid change and facilitates greater transparency for the regulators.
Besides use cases in financial markets, blockchain technology is also eyed by Indian peer-to-peer lending startups including Faircent, Micrograam and i-lend. These startups are all exploring the technology’s potential to improve transparency, and automate and record transactions on their platforms.
The Economic Times reports that these players are still awaiting approval from the Reserve Bank of India to integrate blockchain technology, although some industry observers are expecting the central bank to legalize blockchain-enabled contractual systems by the end of the financial year.