DeFinity has announced a new partnership with market infrastructure provider Cobalt, focused on the facilitation of real-time clearing, settlement and dynamic risk and credit management.

The deal will oversee the creation of a secure technical infrastructure by maintaining the legal confirmation of each transaction, achieved by leveraging the combined technology of both companies.

By entering the collaboration, the partners have outlined a commercial objective of offering clients the ability to leverage the process of capital markets for digital asset trading.

Manu Choudhary, CEO and Co-Founder of DeFinity – an institutional digital asset marketplace for fiat FX, cryptocurrencies and central bank digital currencies – has underscored a vision to establish his company as a “leading electronic communication network (ECN) delivering sustainable and non-fragmented digital asset liquidity to market participants”.

He remarked: “Currently digital assets are at the identical point of evolution that Fiat FX was in the 1980’s with large bid/offer spreads, an absence of standardisation, insufficient segregation of duties, combined with inefficient and fragmented liquidity, which introduces far greater operational and systemic risk for participants. 

“The partnership provides an enterprise solution for digital assets to interact with traditional FX counterparties with roles throughout the execution lifecycle – custody, execution, clearing, and settlement – clearly defined.”

The CEO further noted that Cobalt’s extensive network of clients and investors – which currently includes large banks and funds – was a key reason behind DeFnity’s decision to partner with the company.

Additionally, DeFinity and Cobalt have also confirmed joint collaborations on other products and services, having identified “shared synergies across a number of areas of innovation”.

Darren Coote, CEO of Cobalt, added: “A significant number of financial institutions are eager to capitalise on the cryptocurrency expansion, but the lack of institutional-grade infrastructure limits investment opportunities. 

“The prevailing settlement process is extremely manual, open to significant risks, and not adequate for institutional trading. Cobalt is one of the only firms providing critical market infrastructure in both digital assets and FX and our partnership with DeFinity will help to distribute our post trade solution to a broader demographic of institutional traders.”