FIX Trading Community teams up with GDF to form a new working group

The FIX Trading Community entered into a new partnership with Global Digital Finance (GDF) with the goal of forming a joint working group. The group’s focus will be on connecting buyside trading desks with the world of tokenized assets.

What does the joint initiative aim to achieve?

The joint initiative was named the FIX-FinP2P Protocol Interoperability Alliance. Its main goal is to try to upgrade existing financial infrastructure in a way that will allow it to interact seamlessly with DLT by facilitating interoperability across blockchain-based platforms and traditional financial systems.

The first order of business is to enable messaging between digital securities and the world of traditional finance. Digital securities include regulated tokenized versions of real-world assets, like loans, bonds, alternative investments, money market funds, repo, and securities lending.

Achieving this will require the integration of open-source FinP2P tokenization interoperability protocol and open-source FIX Trading Community, with Ownera acting as an integration partner.

The new joint entity, known as the Joint GDF and FIX Trading Community Working Group, had its first meeting a few weeks earlier, on June 20. It was decided that it will operate over a four-month period, and during this time, participants — including GDF and FIX Community member firms, as well as relevant blockchain tech firms — will work together on testing the integration of a trading system based on FIX with a FinP2P router in a sandbox environment.

Challenges and goals

Commenting on the new development, GDF Tokenization Forum’s co-chair and the head of business development and marketing at Ownera, Anthony Woolley, shared what he views as the biggest challenge. According to him, the main issue in the way of tokenization initiatives is connecting market supply and demand at scale while making it easy for buy-side institutions to gain access to the pipelines of high-quality assets that are being tokenized and offered by sell-side.

He added that the FIX-FinP2P Alliance intends to tackle the issue head-on. They intend to enable institutions to use the existing FIX Gateways to reach the world of tokenization. The advantage of this approach is that companies won’t have to worry about the expenses and complexities of integrating technologies like blockchain and digital custody into their systems.

The Alliance’s efforts will result in the creation of a white paper that will summarize the sandbox testing results and the insights that the partners gained during the research. It will also contain recommendations on how to improve FIX to accommodate digital assets easily.

Meanwhile, FIX Trading Community’s executive director, Jim Kaye, said: “This Alliance is a natural partnership – both FIX and FinP2P were conceived as open peer-to-peer protocols and the potential for our community to use their FIX gateways to instruct the orchestration and settlement of tokenization transactions over FinP2P will be a testament to the power and flexibility of the FIX messaging language.”