(30 July 2024 – Global) UBS and CIBC have completed the first-ever intraday FX swap on the DLT-enabled Finteum Platform, executing a EUR/USD swap within minutes on the TP ICAP UK MTF and settling both legs on the same business day.
This new trade type aims to create super-short-term interbank markets, significantly reducing banks’ High-Quality Liquid Assets (HQLA) requirements for intraday liquidity, which can cost large banks up to $75 million annually due to slowly falling interest rates. Finteum uniquely offers both FX swaps and repos on the same platform, benefiting bank treasury teams that use these markets interchangeably.
Rupert Hume-Kendall, Finteum’s vice-chair, highlights the growing importance of intraday FX swaps and repos in global banks’ liquidity management strategies. A recent trial with 14 global banks, including Barclays, NatWest, and Citi, demonstrated the potential of the intraday repo market.
Finteum, using R3’s Corda, aims to simplify post-trade actions, making digital capital markets more efficient.
Anthony Clark-Jones, who leads the Strategic Ventures portfolio at UBS, says “This world-first trade over Finteum is another step towards institutions and their partners realising the commercial, risk-associated and client-related benefits of truly digital capital markets, and compliments recent progress elsewhere with, for example, institutional digital cash and digital collateral.”