In Foreign Exchange Markets, 9th Gear gains, CLS stumbles. Why? Patents.

9th Gear Technologies, a Silicon Valley start-up, is dragging foreign exchange markets into the 21st century. The company utilizes a blockchain-based platform to tokenize different world currencies. The tokenized currencies are then able to be exchanged with those held by other users and quickly cashed in for the corresponding fiat currency. 9th Gear’s platform will likely greatly increase the speed and efficiency with which foreign currency transactions are settled. That’s great news for companies with assets in multiple countries, as it will allow them to better hedge against foreign exchange risk.

In April 2021, 9th Gear had its first US application publish, signaling that it’s serious about bringing its platform to US markets. Foreign exchange markets involve the exchange of over $6 trillion dollars each day, but if 9th Gear is serious about owning this space, it needs to make sure to have patents covering every angle.

For those familiar with the business, talking about blockchain and FX markets might immediately bring to mind CLS Group, which has been using blockchain technology for FX markets since 2002. However, CLS admitted in 2019 that it did not have a blockchain solution for the settlement of foreign exchange transactions, going so far as to say it was “way, way off.” Fittingly, 2019 was also the year that 9th Gear Technologies emerged from stealth mode, announcing it could offer blockchain-based services for that very purpose. And the egg on CLS’s face continued to run. While CLS’s position in the industry might seem daunting for 9th Gear, the fact that at least half of the banks that originally committed to working with it have backed out and that it cannot perform blockchain-based settlement means that 9th Gear has a clear opening. Oh, and one other thing, CLS Group has 0 patents in the sector.

For more news on patents and the FX market, follow the Securities Tokenization Patent Forecast®.