Major banks funding Bitcoin startup on recording blockchain deals
Digital Asset Holdings LLC, a startup engaged in applications development in blockchain technology, has mobilized funding support from the world's largest banks and stock exchanges. The Bitcoin startup has raised over $50 million from the major banks. Digital Asset Holdings will work with investors on developing decentralized ledger system to record transactions for the digital currency bitcoin.
Digital Asset Holdings is led by start banker Blythe Masters, a former global head of commodities at JPMorgan. The bitcoin startup has raised more than $50 million funding from the world's largest banks. Digital Asset Holdings has announced that 13 investors including JPMorgan Chase & Com, Citigroup Inc, BNP Paribas SA, CME Group Inc and Accenture Plc have been endorsing its decentralized ledger system.
The latest funding is the first-time round for Digital Asset Holdings, which will apply the blockchain process to Wall Street. The startup is in the process of getting more funding from additional banks shortly. Digital Asset Holdings will be working with investors on research and commercialization of platforms such as distributed ledgers networks, as reported by Market Watch.
Bitcoin-based firms attracted record level of funds from venture capitalists (VCs) in 2015. The bitcoin segment started picking up in 2015. The first quarter recorded over $700million funding to bitcoin startups. Second quarter recorded over $130million funding for bitcoin firms.
More than $60 million was recorded during the third quarter. About $20 million funding was recorded during the fourth quarter. The second half of 2015 recorded slowing down of investment into bitcoin technology, as reported by Silicon Angle.
Digital Asset Holdings CEO Blythe Masters said: "These investments represent a tremendous endorsement of Digital Asset from banks, exchanges, settlement and clearing firms, central securities depositories, and market infrastructure and professional services providers."
Digital Asset's strategic investors will jointly work on developing bitcoin technology-based applications have come together from across the financial services industry to help drive global adoption of transformative solutions which enhance the vital services that they provide, as reported by News BTC, a bitcoin news service.
The deals pertaining to stocks, derivatives, loans and other assets are generally recorded centrally by banks. Some other institutions also do this by charging fee. This is adding costs and consuming more time for bankers. Australia's largest bourse ASX Ltd has hired Digital Asset for developing a distributed ledger for clearing and settling stock trades.
Blythe Masters said: "There has been a great deal of discussion about the potential benefits of utilizing distributed ledger technology, but less in the way of real-world deployment. This business partnership with ASX is the first example of a large-scale, real-world deployment of such technology."
The blockchain-based platforms are in nascent stage. Banks across the world are of positive view about the bitcoin technology potential as it saves time and costs. Some of the current platforms were developed in 1970s.
However, the 2015 was year of consolidation. The industry witnessed 11 bitcoin startups going bust. GAW Miners, Mining ASIC Technologies, Bonafide, Brawker, BTC Guild, Buttercoin, CoinTerra, Harborly, Swarm, 37coins and Yacuna were among those closed down during 2015, as listed out by CoinDesk.
Viswanathan of JPMorgan, said: "We are proud to be a lead investor in this round of financing. Distributed Ledger Technology has the potential to transform the way our industry does business, and we believe Digital Asset has the right talent and technology to make it a reality." The blockchain technology is expected to reduce costs of clearing and settlement of trades globally by $16 billion from the $54 billion. Set up in 2015, Digital Asset is working on enhancing efficiency, security, compliance and settlement speed, while decreasing the costs through distributed ledger technology, according to Digital Asset.
Deutsche Börse AG and Depository Trust & Clearing Corp (DTCC) is also funding the project. DTCC operates clearing and settlement mechanism. Michael Bodson, Chief executive of DTCC has joined the board of Digital Asset. Some representatives from BNP Paribas, JPMorgan and Deutsche Börse also joined the board.