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News: New Startup Will Replace Central Clearing and Rewrite Global Regulation on Margin

26 September 2016 | Bill Hodgson

A new startup plans to replace CCPs which have become "too big to fail". Their website says:


Decentralised clearing - Disrupting the CCP model

​Ever since the financial crisis, regulators have been pushing central clearing to remove counterparty risk and reduce systemic risk. However, as a higher proportion of swaps is cleared through CCPs, clearing houses are concentrating risk on their own balance sheet.  Synswap disrupts this central clearing model and uses blockchain technology to disintermediate CCPs. Decentralised clearing retains all the benefits from central clearing - reduction of counterparty risk exposure, multilateral netting, price transparency - while removing both concentration and counterparty risk from CCPs.


One of the co-founders of the business explained:

We agree that clearing is necessary for OTC derivatives in order to reduce counterparty and systemic risk, however we believe that concentrating counterparty risk within a single point of failure defeats the whole purpose of CCPs. CCPs have become systemically

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