Prime of Prime brokerage with blockchain at its core ethos: Ramy Soliman divulges all

During 2016, London was at the center of an explosion in the number of new prime brokerage services being established.

A timely dynamic indeed, as the provision of several types of institutional services to retail brokerages has coincided with a distinct difficulty in obtaining credit from Tier 1 banks by OTC derivatives firms across the world, thus London’s comprehensive and world-leading financial markets ecosystem becomes more advanced, more complex and more accommodating in order that the execution of trades by retail brokerages can maintain its best execution ethos.

During the course of 2017, the banks began to look closely at how critically important the OTC prime of prime brokerage sector is to their revenue streams, and in some cases began to look at extending services once again in a more liberal manner, despite their own internal risk management concerns around counterparty credit risk.

In October 2016, Stater Global Markets was founded and led by Ramy Soliman, who has spent the last year at Integral Development Corporation as VP Sales for the EMEA region, a tenure which was preceded by 5 years at Citi in eFX Margin Sales for the EMEA region, and 5 years at IG Group where he worked in Institutional Sales.

Rapid evolution ensued, and Stater Blockchain began researching distributed ledger technology and Stater Blockchain came to fruition as part of a renaming from Stater Holdings, which owns Stater Global Markets, and recently began to look at expansion of technological development by entering into an understanding with Hashcove, which has deep domain expertise in Smart Contracts and KYC and has customised solutions including the Cove Identity App for blockchain-based document verification.

Today, FinanceFeeds spoke to Ramy Soliman, the company’s CEO, in London, about the future developments that lie ahead within Stater Blockchain.

Can you tell us more about the latest developments with Stater Blockchain?

We’ve been transforming the business and looking at opportunities to lead the market in terms of blockchain applications for the financial services sector. Stater Global Markets’ investor, Stater Blockchain has announced two significant developments which will help to achieve this vision.

Firstly, they announced their intent to buy Hashcove, a UK-based blockchain-focused tech company with a 20 strong team of blockchain technologists. Subsequently, Long Blockchain Corp, a US-based Nasdaq company, has entered into a letter-of-intent to merge with Stater Blockchain.

This is a major step in propelling our business forward. Stater Global Markets would remain a wholly owned subsidiary of the organisation and would reap the benefits of being part of a Nasdaq listed organisation. For our investors, the combination of fintech with an FCA regulated brokerage is a really powerful value proposition.

It would be of great interest to gain perspective on what aspects of the Blockchain topography that relates to storage of data and ability to share confidential data is useful within a Prime of Prime relationship with brokerages, and whether this can automate or refine some of the execution and trade order flow activity between liquidity provider and brokerage.

One of the reasons why I am so excited about these developments is the opportunity to offer blockchain and distributed ledger technologies to Stater Global Markets clients, particularly to brokers who are one of our key audiences. Stater Blockchain has planned a pipeline of blockchain-based products which will benefit the PoP industry by solving problems with the existing infrastructure, resulting in time efficiencies, cost savings and a smarter way of working for all parties. Our initial plans include a Smart Settlements product and a Smart KYC product.

As a Matched Principal broker, we face the client, the Prime brokers and the Liquidity Providers. With three different parties to interact with across different technology platforms and multiple levels of reconciliations, there can be delays and errors in the transactions or communications from any or all three parties. This has a knock on effect.

Blockchain technology solutions can be developed to address this and our Smart Settlements product will both simplify and speed up the Clearing process.

Similarly, with our proposed Smart KYC product, we can significantly reduce the time needed to on-board a client.

Instead of new clients having to submit paper documentation and each broker needing to manually process and verify the information, the process can be enhanced and automated, with the combination of the client being able to submit digital identification and the broker being able to verify the information which is stored in a central, blockchain-based database.

With regard to Bitcoin, how reliant on the volatile and fluctuating value of Bitcoin is the funding for development of blockchain database technology?

Blockchain is not reliant on Bitcoin’s value. The conversation has moved on. There’s still a lot of uncertainty around cryptocurrencies – and Bitcoin may not even end up being one of the leading cryptocurrencies in the future. Bitcoin’s prominence, however, has fuelled interest in digital currencies and the potential of the underlying blockchain technology.

We are at an early stage of an evolutionary process – and I see both digital currencies and blockchain will evolve separately. There are huge opportunities for both and we are at the start of a transformative period.

New blockchain technologies, just like digital currencies, will need to fight for credibility and adoption in order to thrive. Stater is in a strong position. Through Stater Global Markets we have an existing audience and key contacts for the Stater Blockchain products which we plan to develop.

Given the very high value of Bitcoin and the inability to clear and price it via the standard trade clearing channels, do you think that it is vital to acquire virtual currency-related technology development companies at this time when the Bitcoin prices are high, and if they drop, whether firms will have missed an opportunity as VC investment in Bitcoin related technology will dwindle and firms will be less able to sell to the right partners?

We are looking to acquire Hashcove as its 20-strong team of blockchain technologists represent the best of breed within distributed ledger and digital currencies. For us, the focus isn’t on Bitcoin. Hashcove develops technology for Exchanges, Crypto Wallets and trading – Bitcoin is just one of the many cryptocurrencies that their technology processes.

Bitcoin may currently be the most prominent cryptocurrency but that doesn’t necessarily mean it is the one which will grow the fastest or be the most dominant in the future, especially given the recent volatility. In my view, the current opportunities for VC investment are much wider than being Bitcoin-related technology.

What diversification channels does this open, and will Stater Global Markets look to use automated ledger and peer to peer database technology to further relationships with other entities in the financial markets sector globally?

That is exactly what we are hoping to do as a result of the developments with Long Blockchain and Hashcove. We operate within a global market and hope to distribute our blockchain and digital currency technology solutions to an extensive network worldwide.

Stater Global Markets is a very versatile organisation and we have carved a niche for ourselves in the market which helps us to differentiate from our peers. With our team of technologists at Stater Blockchain and the network of blockchain companies we are working with, we can branch out from trading and create technology for the financial services sector in a wider range of areas. It’s a very exciting time and an opportunity for us to lead in this space.

Is Stater Global Market’s planning to offer Bitcoin trading to clients?

We are not only looking at Bitcoin but are planning an institutional calibre offering across a range of cryptocurrencies.

We have been speaking to a number of cryptocurrency providers over the last few months and have created a robust plan which addresses a number of issues that institutional clients currently face. Stater’s offering will launch this quarter and will provide a scalable solution for clients requiring institutional size digital currency trading.

Our cryptocurrency offering is just one of a number of new developments for 2018. We have just added MT5 to our platform portfolio and have further plans in place for additional products and services for our institutional client base.

The latest developments in our organisation propel us to a whole new level – in essence, we will be a technology incubator for blockchain and we can look at where the inefficiencies are – such as with the current cryptocurrency infrastructure – and can make improvements which impact the industry.

Under the proposed new structures of the organisation, we have the freedom and expertise to develop and tailor some great solutions for embedding blockchain in the financial services sector – and this goes much wider than Crypto Wallets and offering Bitcoin trading.