Tag Archives: digital assets holdings

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Blockchain Babe Blythe Masters in Repo Deal with DTCC

Blythe Masters, the former grand dame of derivatives for investment bank JP Morgan, who after a less-than-glorious exit from her senior role overseeing credit derivatives for House of Morgan and who reinvented herself as a blockchain babe and leads digital ledger startup Digital Asset Holdings, has proven that every cute cat has nine lives. In a press release issued this week, Depository Trust & Clearing Corp. aka DTTC, the industry-owned utility that processes transactions across the multi-$trillion repurchase agreement and government securities markets has entered into an agreement with the startup to test their blockchain application for use within the $2.6tril repo market sleeve so that lenders and borrowers across the often illiquid repo market can have a more efficient tool to track securities and cash flowing between counterparties.

Digital Asset Holdings, for which Masters is Chief Executive Officer, is considered one of the top 3 fintech companies focused on leveraging digital ledger technologies, the basic foundation of the cryptocurrency bitcoin. R3 Blockchain Group, whose investors include a consortium of 42 investment banks and financial service firms and is led by former inter-dealer broker David Rutter, along with Symbiont, the creator of Smart Securities and sponsored by merchant bank SenaHill Partners, are considered to be the other leading players in the space seeking to ‘institutionalize’ the value proposition of the technology that powers bitcoin.blythe-masters-marketsmuse

(WSJ)-Depository Trust & Clearing Corp., a firm at the center of Wall Street’s trading infrastructure, is about to give the technology behind bitcoin a big test: seeing whether it can be used to bolster the $2.6 trillion repo market.

DTCC said in a statement Tuesday that it will begin testing an application of blockchain, the digital ledger originally used to track ownership and payments of the cryptocurrency bitcoin, to help smooth over problems in the crucial but increasingly illiquid corner of short-term lending markets known as repurchase agreements, or “repos.”

Repos play a critical role in the financial system by keeping cash and securities circulating among hedge funds, investment banks and other financial firms.

DTCC, an industry-owned utility that helps settle trades in the repo market and elsewhere, wants to apply blockchain technology to the market, so that lenders and borrowers can keep track of securities and cash flowing between firms in real time.

To test blockchain’s ability to improve repo trading, DTCC has tapped Digital Asset Holdings LLC, a startup run by former J.P. Morgan Chase & Co. executive Blythe Masters. Earlier this year, DTCC invested in the firm focused on blockchain applications, along with a range of banks including J.P. Morgan, Goldman Sachs Group Inc., and others.

 

For the full story from WSJ, please click here

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NASDAQ To Buy ISE Options Mart

(Bloomberg)-In what merger-arbitrage experts might call a ‘take-under’, Nasdaq Inc. is paying less than half the price for what ISE traded for in its last price setting after it agreed to buy Deutsche Boerse AG’s International Securities Exchange for $1.1 billion, catapulting it to the top of the U.S. options market.The transaction could also help Deutsche Boerse fund another acquisition. The Frankfurt-based company is in merger talks with London Stock Exchange Group Plc. Deutsche Boerse has been trying to sell ISE, which it bought for $2.8 billion in 2007, since at least 2014.

ISE runs three options markets, and so does Nasdaq. Together, those six exchanges handled 38 percent of U.S. volume in February, which exceeds the current leader CBOE Holdings Inc.’s 27 percent, according to data compiled by Options Clearing Corp. However, CBOE arguably retains the jewels of options trading: exclusive rights to contracts on the Standard & Poor’s 500 Index and the VIX, a CBOE product that tracks investor fear.

“We are going to have the size and scale that competitors don’t have,” Nasdaq Chief Executive Officer Bob Greifeld said in a telephone interview Wednesday. “We’ve paid attention to ISE for a long

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Bob Greifeld, NASDAQ

period of time.”Nasdaq sees the deal closing in the second half of the year and plans to fund the transaction with debt and cash, according to a statement Wednesday. This is the New York-based company’s fourth acquisition in recent months, following deals for an investor-relations business in Canada, the Chi-X Canada stock market and SecondMarket, a platform for trading shares of private companies.

Deutsche Boerse is keeping two parts of ISE: its ownership interests in Bats Global Markets Inc. and Digital Asset Holdings LLC, according to an e-mailed statement. Bats runs exchanges for stocks, options and currencies. Digital Asset Holdings is trying to use blockchain, the software underpinnings of bitcoin, to dramatically speed up the processing of financial transactions.

A stake in a key options-market utility will shift over to Nasdaq through the acquisition. Both Nasdaq and ISE own 20 percent of Options Clearing Corp., the clearinghouse for all trades of stock options on U.S. exchanges.

“We think that’s an incredible organization and asset certainly as time goes on,” Greifeld said. “We’re very pleased with that part of this transaction.”

Shareholders of OCC recently began receiving dividend payments, compensation for a regulatory mandate requiring its owners to contribute more capital to support the organization. Bats Global Markets, which handles just over 10 percent of U.S. options trading, has complained it’s unfair it doesn’t get those dividends because it’s not an OCC owner.