On March 28, 2017, OTC Exchange Network (OTCXN), an institutional trading network and infrastructure provider of blockchain technology, announced its membership to the Chamber of Digital Commerce.
“We’re pleased to welcome OTC Exchange Network to the Chamber of Digital Commerce’s membership,” said Perianne Boring, Chamber of Digital Commerce founder and president. “OTCXN has already demonstrated tremendous enthusiasm and leadership in supporting industry collaboration. We look forward to their participation in our many initiatives and working groups.”
OTCXN functions as a blockchain-based peer-to-peer (P2P) electronic trading network that offers a suite of end-to-end solutions with real-time services, such as collateral management, pre-trade credit checks, liquidation risk management, etc. In an interview with ETHNews, Rosario M. Ingargiola, the founder and chief executive officer of OTCXN, explained that, as a member, OTCXN will support the Chamber by providing leadership and assisting “with articulating” the benefits of blockchain technology to policy makers and regulators.
"Gaining the support of regulators and lawmakers will be essential for institutional adoption of blockchain technologies. This requires an education process and a collective, yet unified voice - and the Chamber of Digital Commerce is leading these essential industry efforts.” said Ingargiola.
Currently, exclusive credit relationships with Tier-1 prime brokers must be established in order to conduct any type of trading activity in the foreign exchange (FX) market. However, OTCXN’s marketplace differs from traditional over-the-counter marketplaces by widening access to the wholesale market.
OTCXN’s P2P marketplace enables anyone with enough collateral to back their investments to trade with others on the network. It also allows firms and individuals trading in FX to obtain access to affordable prices that are not influenced by intermediaries. Ingargiola stated:
“This means any firm or individual that is trading FX whether for speculation, hedging, or for physical delivery, will be able to access the best available prices without manipulation from credit and other intermediaries and without outsourcing this important function to a custodian acting as a principal (conflicted) or as an intermediary.”
Ingargiola further explained to ETHNews that OTCXN protects investors by eliminating the need for credit intermediaries to act as custodians of collateral and by not maintaining records of member credentials. In addition, all transactions across the network are validated in real-time, which mitigates man-in-the-middle attacks.
“Nonetheless, all transactions are validated at time of execution against defined rules of engagement; there is no possibility of a man in the middle attack at this stage as it happens within the core code, i.e., there is no interaction from one micro-service to another -- all data is validated on receive/send from any service (if there are ancillary services).”
OTCXN is considering registration with the Commodity Futures Trading Commission as it navigates closer to supporting FX derivatives. However, Ingargiola told ETHNews that registration with other independent agencies will be based upon needs.
“Registration with FINRA, the SEC and possibly other regulatory bodies will be addressed as we move into other asset classes that necessitate it unless we choose to partner in these markets with regulated entities.”