As more securities are issued on a blockchain, the ownership record of who owns those bonds can be tracked, Rutter said. “The blockchain always knows where it is, and that’s part of the secret sauce.”
Many new debt platforms are ultimately gobbled up by competitors, such as the acquisition of LiquidityEdge by MarketAxess last year. Others never break through, such as Direct Match Holdings — a Treasury-trading venue that failed to gain ground in government debt dealings.
LedgerEdge plans to hire more people and meet with potential clients in the fall to go through product designs and prototypes, Nicol said in an interview.
Bloomberg LP, the parent company of Bloomberg News, competes with Tradeweb, MarketAxess and Trumid in providing fixed-income trading services.
‘Precision Weapon’
The next breakthrough in boosting electronic bond trading will come in areas of the market that are harder to transact, like high-yield debt and large deals that now are done over the phone, said Kevin McPartland, head of market structure and technology research at Greenwich Associates.
“In some ways the idea of having more transparency without information leakage contradicts itself,” McPartland said. “But technology is making it possible, where you can have rules-based systems that help the buyside have some controls over who sees their information.”
Bloomberg