The FIX is in, Wall Street and Bitcoin
One By One, They Fall
Step by step, nobody can deny bitcoin is gaining traction within the financial industry. Even though Goldman Sachs does not yet have an institutional perspective on Bitcoin, according to TechCrunch, they do have several initiatives underway to get a handle on the phenomenon.
Blythe Masters, an ex-JP Morgan executive with expertise in credit default swaps recently joined a startup that wants to integrate bitcoin with Wall Street. Her company called Digital Asset Holdings hopes to decrease settlement times and reduce fees via smart contracts.
The 25th and longest serving SEC Chairman, Arthur Levitt, took an advisory position with well funded merchant processor BitPay. Mr. Levitt once said, “The intellectual firepower behind [bitcoin] enterprises is astonishing”.
His ex-colleagues over at the US Commodities Futures Trading Commission (CFTC) reported over 5,000 people, mostly from China, watched their webcast on bitcoin. The CFTC has made it clear that bitcoin falls under its jurisdiction and it actively regulates the bitcoin derivates market.
Two very prominent members of the financial community, American Express CEO and Chairman, Kenneth Chenault and ex-Citigroup CEO, Vikram Pandit both believe bitcoin has a future in global finance. So it was no surprise that Coinbase announced support for the Financial Information eXchange protocol (FIX) on the Coinbase Exchange. This is yet another step that gives bitcoin more exposure to mainstream finance.
A Crucial Domino
Bitcoin now joins other important markets which already benefit from FIX, including over $150 trillion in annual turnover for global equity markets. Proponents will argue that bitcoin is now just “another” asset class that uses FIX, just like the debt and derivate markets or the $5 trillion in foreign exchange transactions that happen around the globe per day.
The tech behind the FIX protocol is well understood and we now have a large and active global developer community who are able to integrate bitcoin into the world of finance. This makes bitcoin that much easier for exchanges, institutions, regulators and analysts to understand and operate.
What Is The FIX Protocol?
The FIX protocol is the blood of the financial industry, it is the open source agreed upon standard that companies use to communicate trading information among themselves. It has become the way the world trades, virtually every major stock exchange and investment bank uses FIX for electronic trading.
The FIX protocol and bitcoin are similar in the way that actual money is exchanging hands and assets are being moved. Messages can not be intercepted and tampered with and each transaction must be recorded and made available upon request. Exact time of each transaction must be recorded and the client and server must be able to keep records in sync even after a service interruption.
Being able to integrate with the FIX protocol will enable bitcoin’s continued adoption and could even be a catalyst for accelerated growth.