An established and regulated broker is launching a Blockchain-based trading network which allows users to trade any financial asset around the world.
TradeConnect plans to “democratize” the industry by enabling trades to be settled in seconds rather than days. It will initially offer forex (FX) and contracts for difference (CFD) – expanding to futures, bonds, options, commodities, equities and complex derivatives over time.
Ending the dominance of big banks
The team behind TradeConnect believe Blockchain has the potential to deliver the biggest shake-up to the markets since the advent of electronic trading in the 1980s.
In part, this is because of how Blockchain can reduce a trader’s reliance on brokers and intermediaries – with the company arguing that global markets are currently dominated by big banks who impose unfair charges, lack transparency and sometimes have undue levels of influence on asset prices.
Under the TradeConnect platform, trades are automatically executed through smart contracts which are based on external sources and impartial information. Individuals will also have the chance to trade with each other, and all participants will have “full control of their money.”
The company claims that, in the past, investors have lost their money when financial institutions have collapsed because they were unable to settle their funds. However, TradeConnect claims its settlement method means the risk of this happening again in the future would be “substantially reduced” because of the near-instant nature of trades.
“Vastly lowering the cost of trading”
According to TradeConnect, its wallet will initially support Bitcoin, Bitcoin Cash, Ethereum, Monero, Dash and Litecoin.
A ‘connect fee’ is charged for each trade that is completed on the TradeConnect platform – and the company says 75 percent of the revenue generated will be returned to participants in the ecosystem, with the rest being used to further develop the network.
Investors will also have the ability to purchase “micro shares” – fractions of equity instead of a full share in a publicly listed company – and TradeConnect says this feature, when coupled with lower fees, will “vastly lower the cost of trading” and give flexibility to people who only have small amounts of money to invest.
The TradeConnect timeline
A beta version of the Blockchain network is going to go live in August, and the functionality for FX and CFD trades will be introduced in October. Further trading products are expected to be added by the beginning of next year, and the company expects that TradeConnect’s IPO will take place in the summer of 2019.
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