As said by Robert Sams, founder and chief executive officer of London-based Clearmatics, Route 66 Ventures LLC, Tellurian Capital Management LLP and Nyca Partners are among the investors.
The backing is the latest sign of interest in using blockchain to make transferring and tracking the ownership of bonds, loans and other assets faster and cheaper, to minimize operational risks.
“As a hedge fund ourselves, we can see the very significant benefits that this new digital settlement coin and the related distributed ledger market architecture will bring to the table in securities trading,” said Jean-Marc Bonnefous, managing partner at London-based Tellurian Capital.
UBS employed Clearmatics in September to help develop a digital coin based on blockchain to settle trades and make cross-border payments. Besides, the Swiss bank wants to collaborate with other financial institutions and regulators to develop a product for the industry that would be backed by real-world currencies and central bank accounts.
According to Mr. Sams, Clearmatics, founded in February, has shown the concept to other companies and it has been well-received.
Oliver Bussmann, the Zurich-based bank’s chief technology officer, admitted that UBS has identified 20 to 25 potential uses for blockchain.
Chris Murphy, global co-head of currencies, rates and credit at UBS, expressed his opinion that blockchain represents a fundamental rethinking of the business process that could replace wholesale and retail-banking activities.
“Across the industry, there are billions of costs that could be at play here,” he said, adding that he is eager to stay close to developments.
As said by Bussmann, UBS decided early on to become part of the fintech “ecosystem’’: in April, the bank installed a team of specialists in Level39, a collective workspace for technology startups in London’s Canary Wharf.
“We are in the very, very early phase stage,’’ said Bussmann. “The race from my perspective is still open. We are putting our eggs in different baskets.’’
Overall, according to research from Accenture, the total amount invested in the global FinTech sector rose from just over $4bn, in 2013, to more than $12bn last year, as record amounts were poured into companies developing technologies that promise to turn the financial sector on its head.
Investments into blockchain tech companies has already exceeded the 2014 total, and many of the world’s biggest banks have publicly stated an interest in exploring the use of blockchain technology. R3 CEV has put together a consortium of at least 22 different megabanks that intend to explore distributed ledger technologies.