In response to the growing demand for hybrid finance, GMEX has bought ING’s Pyctor business to link CeFi and Defi.
The Dutch multinational banking and financial services conglomerate ING Group has sold its digital asset business Pyctor to the multi-asset trading infrastructure company GMEX.
GMEX has purchased ING’s institutional-grade digital asset custody system Pyctor in a multimillion-dollar transaction, the firms said on Monday.
The Pyctor offering complements GMEX’s MultiHub service, and institutional cross-platform business launched last year with the objective of bridging the gap between centralised and decentralized finance, according to GMEX CEO Hirander Misra.
Pyctor augments MultiHub with a number of digital asset-centric features, including smart contract capabilities, post-trade custodial services, and institutional network features such as private key fragmentation.
Pyctor is also meant to facilitate regulatory compliance, including the Financial Action Task Force’s (FATF) Travel Rule framework for Anti-Money Laundering.
“This type of solution developed by a bank for banks, asset managers, and corporate clients may now operate in a neutral environment for institutional investors,” Misra explained. The CEO stated that institutions are trying to enhance their trading and settlement capabilities for digital assets in a manner that is interoperable with existing CeFi systems and asset classes.
This necessitates hybrid finance, or HyFi, which provides a hybrid digital market infrastructure solution with the interoperability of numerous blockchains and API connection into legacy systems to provide a holistic approach.
In 2018, ING launched Pyctor in Amsterdam as a project incubated by its innovation arm ING Labs. The technology of Pyctor handles private keys by fragmenting and spreading them across blockchain nodes maintained by governed entities.
In 2019, ING completed Pyctor’s first proof of concept and then organised a working group for sandbox trials, which included large global banks and enterprises such as BNP Paribas, Citi, ABN AMRO, Societe Generale, Invesco, UBS, State Street, Forge, and others.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.