Paxos, a regulated blockchain infrastructure platform for enterprises, has launched an automated post-trade lifecycle management solution for the precious metals commodities market.
Paxos Post-Trade and Settlement offers multilateral payment netting and simultaneous settlement for the unallocated, over-the-counter precious metals market, reducing the amount of funds leaving accounts, unlocking working capital and reducing counterparty risk.
The firm claims financial institutions that deploy the solution see an average 300% return on investment (RoI) within two years thanks to enhanced back-office efficiency, just as trading volumes have surged over the last three years.
Boosting efficiency could not come at a better time for the commodities market, which traditionally lags more traditional equities markets in terms of settlement infrastructure and efficiency.
While the global precious metals market is projected to grow at a compounded annual growth rate of 8.1%, with market participants set to net revenues of around $415.3 billion by the end of 2028, the increased cost of borrowing and changing regulations have squeezed balance sheets.
Anoushka Rayner, head of commodities growth at Paxos, said Paxos clients using the post-trade and settlement solution are already seeing “billions” of dollars’ worth of reductions in their settled trades and “millions” on funding cost savings.
“Our solution is also helping future-proof users against rapidly shifting regulations around settlement, such as the move to T+1 settlement in the US, with Paxos’ technology permitting clients to settle precious metal trades within a day,” Rayner said.
©Markets Media Europe 2023
