just now
December 09, 2022 - Decentralized Financial Market Infrastructure (dFMI) business Bosonic has announced an industry first in going live with Cross Custodian Net Settlement (CCNS) in which trades in USDC and ETH were executed, cleared, and settled atomically between two digital asset custodians, First Digital in Hong Kong and Propine in Singapore.
Cross Custodian Net Settlement (CCNS) enables custodians to net settle on behalf of all their institutional clients who are either trading on the Bosonic Network™, or trading on other digital asset venues that are using Bosonic Enterprise™ for clearing and settlement and connecting to Cross Custodian Net Settlement via their preferred custodians.
Custodians load digital assets that need to be physically delivered between custodians in a CCNS Smart Contract on Layer-1 public blockchain protocols. Both the institutional clients and the custodians eliminate counterparty credit and settlement risk, reduce their intraday exposures, and improve balance sheet efficiency, addressing the key issues that are inherent in today's operating model in the industry.
Rosario Ingargiola, CEO, Bosonic commented, “This is a pivotal moment in the industry where CCNS will effectively eliminate counterparty credit and settlement risk in digital asset markets with atomic exchange, both trader-trader in real-time, and now custodian-to-custodian for net settlement movements. We’ve been building CCNS for some time and have been looking forward to going live with custodians who are pleased to partner with us on this milestone event. Our vision has always been to remove friction and risk in digital assets, and this is even more important than ever before.
“We are very pleased to be working with First Digital and Propine both pioneers and innovators with great leaders building the future of digital assets. I’m also very pleased to confirm we have a growing network of custodians in the Working Group that are about to go-live and will collectively define the new standards in digital asset infrastructure. Bosonic technology and the role of the custodian makes digital assets safer for institutional clients and fiduciaries.”
Tuhina Singh, CEO Propine said, “Whatever activity you do with digital assets, it starts from a place where they are securely stored and can be safely transferred. A licensed, institutional-grade custodian is thus a prerequisite for crafting a digital assets strategy. Partnering with a licensed service provider is critical, as it provides the necessary investor protection and recourse, as both regulatory and contractual obligations, in case things go wrong, as they sometimes do. The CCNS network, connecting the custodians globally, provides a necessary layer of infrastructure, absolutely crucial to realizing the full potential of, what is essentially and natively, a global asset class. We are glad to be part of this network at its genesis and are committed to growing the industry.”
Didier Lavallee, CEO, Tetra Trust Company, Canada’s first licensed digital asset custodian added, "The recent macro events have highlighted the necessity and importance of institutional investors using a separate and regulated custodian. Tetra Trust is excited to partner with Bosonic on their Cross Custodian Network to create a safe, secure and efficient way for institutional investors to transact.”
Luke Brereton, State Street Digital said, “Our clients are looking for institutional-grade digital asset custody and related services. State Street continues to be focused on delivering to our client’s innovative services and the benefits of our scale and experience. We are building a leading digital business and exploring industry initiatives is an important part of our strategy to establish robust market infrastructure.”
Vincent Chok, CEO First Digital, a public trust company headquartered in Hong Kong, also commented, "Digital asset custodians will have a crucial role to play in the next 6-12 months, especially given the state of the market now with trust being eroded in CEX's. Going forward, we will see players increasingly rely on qualified custodians, the best of which will dominate market share. Institutional investors, now more than ever, will pay closer attention to security and fund segregation. A key driver for digital asset custodians looking to build a sustainable business model is enabling next-generation security, which means incorporating multi-sig, sharding and multi-party computation. When it comes to traditional institutions with large amounts of money and their reputation at risk, having military-grade online and offline security protocols, stringent Anti-Money Laundering and KYC requirements plus client asset segregation is critical.”
Vincent added, “However, innovative technology is not the only component integral to protecting your assets. First Digital has joined a Cross-Custodian Net Settlement (CCNS) Working Group, spearheaded by Bosonic. This is an industry first to include a range of institutional custodians from around the world undertaking net settlements and payments for digital assets and fiat via a layer-2 blockchain, aiming to further enhance safety and efficiency across the market. In addition to this, the business has also expanded beyond just simple custody, we provide a microcosm of a circular economy, which includes balance sheet management, full transparency, counter-party visibility, and escrow services removing friction points for our customers. Most importantly we have a wealth of experience in compliance, regulation, and providing legal frameworks for this new asset class."
Giorgia Pellizzari, Head of Custody, Hex Trust, a fully licensed and insured custodian with offices in Singapore, Hong Kong, Dubai, Italy and Vietnam, "The importance of digital asset custodians has never been greater, as the industry needs trust, security, and transparency to facilitate the next phase of growth. It's vital for initiatives such as the CCNS network to connect global custodians and deliver highly-secure and compliance-focused services for institutional clients. Hex Trust is looking forward to helping the network grow and providing vital services to enable further institutional participation via fully regulated clearing and settlement services for digital assets."
Jason Nabi, CRO Bosonic, added, "The whole team at Bosonic is thrilled to be collaborating with such industry leaders in digital assets. This is not only an industry first, but it is rather unique regarding the best of crypto native and TradFi coming together to better serve institutional clients and enhance asset safety. The network of custodians is already in double digits and global, with the best custodians from Hong Kong to Canada working with Bosonic. Having a regulated Custodian with a focus on institutional clients supporting their fiduciary responsibility, is, as we have learned over the years in TradFi, very important. The same standards are clearly needed in institutional DeFi and crypto, especially considering the FTX crisis.”
Founded in 2016, Bosonic is a leading decentralized financial market infrastructure (dFMI) company with offices in San Francisco, New York and London providing best-in-class infrastructure that eliminates counterparty credit and settlement risk in digital asset markets. The Bosonic Network™ provides institutional clients with a patented solution that is custodian-agnostic, enables tokenization of assets and collateral, provides liquidity aggregation and DMA to the best Exchanges and Market-Makers, and at the core, runs real-time payment vs payment (PvP) atomic exchange and settlement, with cross-margining, multilateral netting, cross-custodian net settlement and payments. The Bosonic Network™ is delivering infrastructure that is reshaping the future of Digital Asset markets by eliminating risk and maximizing capital efficiency for hedge funds, family offices, banks, brokers, asset managers and other market participants.
Established in 2018, Propine is the first independent digital asset custodian licensed by the Monetary Authority of Singapore (MAS). Propine’s bespoke institutional solutions are at the forefront of innovation, and well-placed in the paradigm shift that is surging through global financial systems architectures.
First Digital brings traditional fiduciary services into the digital-first world through technology and developing financial services infrastructure that lets us and our clients create world-class financial products and services.
