Digital Multihub – Digital Market Infrastructure Platform

GMEX has developed the Digital MultiHub (MultiHub) – Platform-as-a-Service (PaaS) as a digital market infrastructure platform to connect multiple financial participants across traditional and digital asset markets.

For more efficient digital assets’ facilitation, as a digital market infrastructure platform needs to be optimised to reduce fragmentation and technical complexity. The use of a hub model integrating private ledgers and public blockchains is essential to facilitate better portability of digital assets as well as seamlessly settle them.

MultiHub, as a ‘multi-asset network of networks service’, facilitates a first of its kind collaboration across major institutions, regulatory regimes and start-ups with the goal of bringing digital assets to the masses:

  • Enhances Connectivity – a globally interconnected, institutional-grade digital market infrastructure platform enabling faster, more efficient trading, clearing and settlement of digital assets across multiple participants with transaction immutability and integrity.
  • Offers Multi-asset APIs – the only end to end solution with a broad range of APIs that enables cross-venue trading, clearing and settlement of traditional assets and digital assets, including cryptocurrencies and hybrid derivatives.
  • Reduces Technical Complexity – cloud enabled, AWS powered by core ledger technology with microservices, which are supported by DXC Luxoft as a technical partner.
  • Facilitates Exchange 4.0 – by driving shared financial gains through unparalleled access to ecosystem participants, encouraging rapid two-way collaboration, therefore creating a new paradigm as part of the Fourth Industrial Revolution (4IR).
  • Enables Multiple Types of Participants Globally – provides a single point of connectivity to link multiple digital exchanges, trading venues, brokers, asset managers, asset service providers, digital custodians, digital banks and FinTech and post trade service providers across global jurisdictions.
  • Reduces Fragmentation – The exchange becomes a bidirectional network effect of products and services between all these participants for mutual benefit, eradicating legacy exchange silos.
  • Ease of Access with Green Credentials – makes it easier for customers to access, trade and settle digital assets with a reduced carbon footprint as digital assets can be pledged by custodians without moving, as well as netted to optimise settlement, therefore reducing the time, cost and energy usage of constantly writing to the blockchain.

Facilitates many types of participants via an advanced digital market infrastructure platform, with the ability to swap services and assets across jurisdictions by way of:

  • A Credit Limit Hub – for multi venue and participant credit allocation from custodians and banks
  • An Order Routing Hub – Facilitate order routing from participants to trading venues, exchange and brokers
  • An Asset Servicing Hub – asset pledge and margining facilitation

MultiHub example services

MultiHub supports services delivered via SWIFT, MQ, FIX and Rest APIs, for Banks and Custodians:

  1. Triparty services for digital via the MulitiHub connectivity
  2. Collateral for digital vs. traditional on one platform
  3. Digital and traditional credit checking, netting and settlement on the same network

For the Buy and Sell side:

  1. Multi-funding and collateralization connectivity
  2.  Ability to access and offer digital products and subsequently harness Atomic Swaps
  3. Best Ex (GBBO) across Digital Products and multiple venues

MultiHub facilitates:

Simplified and faster access to market (time to market) 

  • Accelerated multi-custody access approach for digital assets
  • Traditional custody benefits for pledging and settlement
  • Post-trade services for funding and lending

Governance and control for digital assets 

  • Trading Venue Interface – Multi trading venue access
  • Limit Management – Limit management (portfolio level across traditional and digital assets)
  • Collateral Management – Asset management and reuse of assets to reduce credit risk
  • Trading Risk Analytics – to optimise treasury management such as intra-day funding
  • Position Management – Ledger allows the single real-time view for assets and positions management across multiple trading venues/ exchanges
  • Market Risk Dashboard – real-time margining and risk management
  • Settlement/ Cash Flow Forecasting – real-time credit checking based on trade updates to continually compute net settlement exposure
  • Trade Netting and Compression – real-time netting and net settlement
  • Custody – Client/Multi-broker connectivity allows clients to select custody and settlement agent

Features and Benefits of MultiHub

MultiHub enables access via a digital market infrastructure platform to exchange products across multiple exchanges with access to multiple custodians and banks/ capital markets entities creating additional distribution and revenue opportunities.

This increased institutional participation builds a trusted network making it easier for B2B clients currently in – or entering – the digital assets space to connect with each other to validate, trade, clear and settle.

Participants

Investors and Traders:

  • Move assets seamlessly with less complexity between exchanges and managing their own OTC execution
  • Cost of entry into digital assets is reduced
  • Cost and time to move assets is reduced

Exchanges and Trading Venues:

  • Cross border transaction facilitation
  • Ease of multi party settlement
  • Optimisation of asset utilisation for their members across a broader ecosystem
  • Plugging in and attracting potential clients, partners and services more easily
  • Cross selling their own services more easily over the hub

Custodians:

  • Netting efficiency
  • Asset rehypothecation facilitation
  • New revenue streams from the multiple venues and participants that connect
  • Cross selling new services to the existing client base

Features

Simplification for digital market infrastructure access and time-to-market

  • Accelerate multi-custody access approach for digital assets (e.g. Triparty)
  • Traditional custody benefits for pledging and settlement
  • Post-trade services for digital funding and lending

Scalable pricing and cost transition 

  • As transaction volumes increase, the corresponding price per transaction decreases
  • Transition ‘legacy stack’ to digital + traditional asset (e.g. FX)
  • Consolidated Market Data
  • Set up costs are efficient by joining an established digital market infrastructure platform with integration points vs. a full stack development
  • Allows for ‘test-launch-pivot’ product offerings

Control and governance for digital assets

  • Core Ledger allows the single view for assets and positions (NAV) management across multiple venues
  • Treasury management such as  intra-day funding
  • Asset management with real-time netting and settlement and reuse of assets – traditional vs. digital

Market-marking / Widen product offerings 

  • Offer digital-only products (e.g. Atomic swaps)
  • Pluggable lending and prime broker opportunities for liquidity
  • Removes the requirements for prefunding position keeping
  • Total portfolio or segmented limit and position management
  • Less slippage with consolidated order book

Extended and efficient digital market infrastructure connectivity 

  • Multi trading venue access via a single interface
  • Best Ex Global Best Bid and Offer (GBBO) for digital products
  • Cloud-native with rapid load balance
  • Limit management (portfolio level across traditional and digital)
  • Client/Multi-broker connectivity allows clients to select Custodian as the cross-settlement agent (traditional and digital)

Structure

  • Covers full investment/trade lifecycle with all key participants
  • Provides digital market infrastructure connectivity and interfaces between Trading Venues, Clients (e.g.  Buy Side) and Post Trade/Custodians
  • Based on a ’Hub and Spoke’ model to solve current connectivity challenges in  markets
  • Scalable design with open architecture to support new feature development and localisation for customers
Click here for MultiHub Case Study
Click here for MultiHub FAQs
Click here for blog post
Click here for press release