The development will see the trading platform leverage CobaltFX’s Dynamic Credit process to achieve more flexible and scalable trade execution by optimising credit intermediation, reducing operational risk and enhancing liquidity efficiency.  

24 Exchange has said that the partnership will allow counterparties to pre-set credit relationships and allocate available credit based on real-time trading conditions.   

Jason Woerz, president of 24 Exchange, said: “We are thrilled to be live with FX swaps trading and to offer our clients a more efficient, cost-effective trading environment. The collaboration with CobaltFX, allows us to redefine how credit is managed in the FX market, giving participants unprecedented access to liquidity.” 

Cobalt relaunched as CobaltFX following its acquisition in December 2022 by United Fintech, with a complete focus on foreign exchange in what chief executive Marc Levin described at the time as “returning to the company’s roots”.

This latest development is also expected to address challenges which often face the FX swaps market, including credit limitations, operational inefficiencies, pre-funding constraints and settlement risks to allow traders to access deeper liquidity pools and execute larger trades.

Read more – BNP Paribas expands CobaltFX relationship to streamline bank credit allocation

“24 Exchange’s adoption of our Dynamic Credit process is a testament to its ability to revolutionise credit management in FX markets,” said Darren Coote, chief executive of CobaltFX. 

“By optimising credit usage in real-time, we are helping the industry reduce risk while increasing efficiency and transparency.” 

In November 2024 the US Securities and Exchange Commission approved 24 Exchange in an effort to “significantly expand trading outside of regular trading hours” for NMS stocks. 

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According to Andy Coyne, founder of CobaltFX, a Single Point of Failure (SPoF) in FX post-trade messaging – created by market consolidation – poses a threat to the entire global financial ecosystem.

Coyne highlights that a number of ‘overdue’ core improvements need to be made, including execution messages having alternative solutions that can run free of charge.

“Our clients raised two key concerns about the industry to us which were the main drivers for this launch. Firstly, the consolidation of multiple services into a single parent company resulted in a concentration risk. Secondly, a recent hack of a service provider significantly disrupted market operations. Whilst this didn’t affect the FX industry, it highlighted a potential issue which could severely impact our sector,” Coyne told The TRADE. 

“Clients were concerned that they didn’t have a plan B should there be a cybersecurity attack. They wanted to make sure something was in place which they could easily switch over to if necessary. Even regulatory bodies are becoming increasingly concerned about this – so this is where CobaltFX has stepped in.”

CobaltFX aims to tackle these issues with its new Trade Notification Network (TNN), which has been developed in response to increasing concerns across the industry from financial institutions related to SPoF.

TTN looks to provide banks with alternative choices for post-trade FX messaging and offers a backup plan in the event of cyberattacks and other forms of failure in the FX market.

CobaltFX stated that the new offering will enable the industry to break free from the ‘Hobson’s choice’ it has been dealt for decades – where alternative options are essentially limited.

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According to CobaltFX, the move is indicative of a trend among financial institutions seeking to optimise the disbursement of credit for FX trades and to improve market access and control.

BNP Paribas and NatWest have both been partners of CobaltFX over the years and by increasing their engagement by going live with Dynamic Credit, the two firms will manage credit exposures for their respective financial institutions, addressing overly manual processes.

“By providing a standardised and digitised approach, and aggregating IT infrastructure across multiple venues, Dynamic Credit gives banks unprecedented control to navigate fast-moving FX markets and proactively manage credit exposure,” said Joe Nash, digital COO for foreign exchange, rates and commodities at BNP Paribas.

“This is a very important step in delivering a solution for credit providers, taking full advantage of new technical advancements.”

Three months after United Fintech acquired Cobalt, a relaunch of the firm to CobaltFX was announced – along with a forthcoming digital asset arm – which chief executive Marc Levin described as a return to its roots for the FX business.

United Fintech stated that reducing risks through simplification and streamlining of credit disbursement will be paramount as CobaltFX aims to solves pain points within the FX industry.

“The problem CobaltFX is solving is essentially simplifying and streamlining many of the manual processes tied to allocation of credit which creates challenges for financial institutions. I.e. leveraging tech to enhance market stability,” said Andrew Coyne, founder of CobaltFX.

“Thus, correcting the supply of credit and at the same time deepening the availability of liquidity, CobaltFX’s Dynamic Credit technology ensures that for less credit deployed, there is more liquidity, administrative simplification and, essentially, superior market access control – the latter being a key factor for financial institutions around the world.”

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“CobaltFX’s goal is to re-engineer the world of foreign exchange through a rock solid platform focusing on credit optimisation and post-trade FX. Dynamic Credit being the most important starting point,” said Andrew Coyne, founder of CobaltFX.

“As part of United Fintech, we join four other partner companies, retaining our formal status as a partner company. There are a lot of synergies between the partner companies and United Fintech. Not only from a client and solution perspective, but from a visionary perspective; together, we’re stronger than ever.”

CobaltFX will now focus entirely on FX, thus leaving the company’s digital asset division removed from the product offering. However, United Fintech has announced plans for a digital asset ‘spin-off’, with further details to be disclosed in Q2.

“We believe both opportunities are huge and should be pursued, but not under the same banner. While FX and DA are similar in many ways, and likely to merge in the future, the two industries are currently at very different maturity stages of their evolution, largely operating independently and therefore requiring different approaches to be successful on their own,” said Marc Levin, chief executive of CobaltFX.

Following the relaunch, Darren Coote, who served as managing director at Cobalt, will take on a bigger role in United Fintech, working with other partner companies.

In addition, Elizbeth Missfeld will step in from United Fintech as chief operating office, and Erik Nordahl will join as chief technology officer to help deliver CobaltFX’s vision and commitment to clients.

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