The IEX Group, which shocked market participants on August 19 when it became the first official exchange to offer a mechanism to bypass HFT predatory algos and frontrunning against all odds, including vocal complaints by established players like Nasdaq and Citadel, now seeks to revolutionize the more than $5 trillion-a-year gold market with a new exchange being created by its spinoff TradeWind Markets, Reuters reports.
The proposed gold exchange would be a fascinating departure from convention, as it would use elements of blockchain technology to improve transparency and the clearing and settling of trades, an aspect missing in legacy offerings, said Matt Harris, a managing director at Bain Capital Ventures. Bain has an investment in IEX. Blockchain is a tamper-proof shared ledger that can automatically process and settle transactions using computer algorithms.
The new gold exchange is said to leverage the technology used by IEX for its new equities exchange, The Investors’ Exchange, which launched last month after operating for more than two years as a dark pool. TradeWind plans to utilize the distributed settlement system in blockchain to eliminate the need for third party verification by giving participants an up-to-the-minute record of all transactions.
This post was published at Zero Hedge on Sep 7, 2016.