The New York-based capital markets technology firm Axoni announced the closing of a $31 million equity financing that included banks like Deutsche Bank, Intel Capital, and UBS.
These additions to the list of investors, which already included Citi, Goldman Sachs, HSBC, J.P. Morgan, Nyca Partners, and Wells Fargo, have raised the total funding achieved by Axoni since its inception to a staggering $90 million.
While blockchain technology was seen as a threat to the financial industry some years ago, financial institutions have started exploring and integrating the technology in their platforms to reduce costs and improve security.
Natalie Horton, Global Head of Capital Markets Financing at UBS, referred to the investment by stating:
“Axoni are proving themselves to be a market leader in providing technology solutions in a digital world. We are excited to partner with them to drive solutions to benefit the future of our industry, such as enhancing our front-to-back client experience and delivering operational efficiencies.”
According to experts, the $31 million investment is expected to save the capital market billions of dollars over the next few years.
An Example of Success
Axoni was founded to build and implement blockchain technology to overhaul the global capital markets infrastructure by providing workflow automation, enterprise infrastructure, and distributed applications.
In January of 2017, the company partnered with the Depository Trust and Clearing Corporation (DTCC) by providing them with the platform to move its $11 trillion Trade Information Warehouse for credit derivatives swaps to the
In February of 2020 Citi and Goldman Sachs announced they successfully used Axoni’s blockchain to complete the first blockchain equity swap, an important milestone in the industry and for the startup. Three months later, the Options Clearing Corporation, announced it would move $72 billion in equities to the network.
Ever since the company has continued growing and attracting interest from financial institutions across 3 continents.
Blockchain in the Capital Markets
Blockchain technology and cryptocurrencies have historically being a disruptive force in different industries due to the benefits and new applications it offers. This has been especially true over the last years in the financial sector as reflected by the growing Decentralized FInance movement and its success in 2020.
However, despite the increasing popularity of DeFi, blockchain technology is becoming an integral part of Centralized Finance (CeFi) instead of the element of its destruction as many believed it to be in the past.
It is estimated that over 50% of the world’s total container traffic is committed to run on blockchain networks for different use cases such as issuance, sales, trading, collateral management, asset servicing, etc.
This has resulted in stock markets like NASDAQ partnering with R3 to use their blockchain software to build full trade lifecycle solutions for digital assets marketplaces in April of 2020, which quickly became their default platform in later months.
Bigger Interest is Around the Corner
S&P Dow Jones, in collaboration with Lukka, also announced it would be launching its Cryptocurrency Indexes in 2021, which will include the top 500 cryptocurrencies.
These moves by some of the biggest markets show a trend that is likely to continue over the next years as the adoption of blockchain and cryptocurrency continue growing. In fact, there are a number of reasons to think that major tokens are taking on a new role in the global financial system.
In 2020 a number of large companies jumped into the crypto markets, and unlike many traders, companies like Grayscale seem to be hoarding tokens for the long haul. This is based on the massive amount of new investments, which just seem to be expanding.
A one-way street is just that – and for central banks – the party is just starting.