ING Bank, a Netherlands-based multinational banking and financial services corporation, announced on Monday that it has spun off its institutional-grade digital custody platform Pyctor to GMEX Group.
The Dutch bank GMEX has acquired ING’s Pyctor digital asset custody tool in a multi-million-dollar deal. Pyctor provides safekeeping and transactional network services for a wide variety of digital assets and also enables interoperability between permissioned and public blockchains.
While Olivier Guillaumond, the global head of innovation labs & fintech at ING, did not reveal the deal’s financial terms, Guillaumond said: “We have found the right partner in GMEX to scale Pyctor to the next stage. It brings the ideal connectivity between multiple trading parties and digital assets custodians, while addressing interoperability issues experienced in the market.”
The Pyctor platform is set to add value to GMEX’s MultiHub service; a cross-platform institutional business launched last year to bridge the gap between centralised finance (CeFi) and decentralised finance (DeFi).
Pyctor will expand MultiHub with several digital asset management capabilities, including smart contract features and post-trade custodial and institutional network capabilities such as the fragmentation of private keys.
Furthermore, Pyctor is designed to support regulatory compliance, including anti-money laundering and counter-terrorist financing (AML/CFT) measures set by the Financial Action Task Force (FATF) framework.
GMEX chief Hiranda Misra has been appointed to serve as the chairman of Pyctor. Other senior appointments will be named in due course.
Misra commented: “With this acquisition, GMEX Group consolidates its position as the first platform to offer an end-to-end multi-asset, multi-sector Hybrid Finance (HyFi) solution that bridges the gap between off-chain traditional finance and on-chain decentralised finance across jurisdictions.”
Misra disclosed a market demand for this form of offering (hybrid finance solution) built by a bank for banks, asset management firms, and other institutions, which now operate in a neutral environment for institutional clients.
In 2018, ING began Pyctor as a project incubated out of its innovation arm ING Labs in Amsterdam. In 2019, the bank completed Pyctor’s first proof of concept. It then established a working group for sandbox trials, including participation from major global banks and firms such as Invesco, Citi, State Street, BNP Paribas, Societe Generale, among others.
Enabling Clients to Secure, Trade, and Manage Digital Assets
The reason why ING sold its digital asset custody platform Pyctor is that the bank believes that spinning it off to another institution (in this case GMEX), which specialises in digital assets could enhance the overall appeal of the platform to prepare it for widespread adoption in a more robust manner.
The way ING Bank has sold its institutional-grade digital custody platform Pyctor to GMEX is the same approach that JPMorgan giant bank spun off its enterprise-grade Ethereum platform Quorum to ConsenSys, a blockchain software technology company.
In August 2020, ConsenSys acquired Quorum, an enterprise Ethereum protocol technology developed by JPMorgan.
ConsenSys incorporated Quorum into its existing protocol engineering platform to support applications requiring high speed and high throughput processing of private transactions to clients.
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Source: https://blockchain.news/news/netherland-ing-bank-sells-digital-asset-custody-solution-pyctor-to-gmex