LMAX Exchange
David Mercer looks further afield and beyond the regularly discussed topics of geography, greater transparency and growing regulation. In the context of the current challenges in the FX market, David offers views on how the market may be transformed in the very near future.
Video Transcript
David Mercer looks further afield…
David Mercer: Ok, so let’s talk about the future of FX, let’s look further afield, we could talk to death about geography, greater transparency, growing regulation but let’s have a bit more fun and let’s challenge the way things are done presently. So, T+2, it really takes two days to settle these days when you can transfer in your bank account instantaneously? The technology is available for instantaneous settlement so it’s going to happen, we will be charged interest on a second by second basis, you pay interest or earn interest on a second by second basis so we can do it, let’s start now, why not? I think secondly, you’re going to see virtual currencies being traded throughout the FX market place and on many venues, I’m very happy to list a virtual currency. There has been a lot of press about BitCoin recently, there has also been some bad press, so I’m not sure that that is going to be the virtual currency. The biggest virtual currency in the world, and by the way the biggest bank in the world, is Facebook, we all have Facebook credits in our account, 600 million users or more growing rapidly. They have virtual currency, the modern society is used to spending that virtual currency daily and on an instantaneous basis. It’s all contained within social media right now, we need to be able to get it out, there is another currency called Venn, I could charge you in Venn or I could buy a Nissan car in Venn. So, more and more virtual currencies will evolve, it’s not that difficult especially with the digital technology that we have now. So, I fully expect for something to emerge and lead the way and I’d be very happy on LMAX Exchange to list the successful, open, virtual currencies. I think another thing that must annoy people, everyone, whether you be on the FX market or you be sitting in the local dentist holiday money! Doesn’t that annoy you, how much you pay when you go to the bureau exchange at Heathrow or JFK, it doesn’t have to be that way. We will go towards a cashless society, it’s possible now to connect with your credit card and pay for something up to £20, that could go to £100 it could go to £1,000. So, imagine if I give you access to the institutional market place, you charge up your credit card instantaneously with dollars, AUS dollars, or Euros, you can then go and spend it in those countries. Again, I think the technology is available and I think it can be done now and I think it will happen notes may be a thing of the past and maybe also a thing of the past when you pay these huge spreads in the bureau the exchange that none of us like. The last bit, which is may be a bit more fun and prevalent today, people talk about copy trading, mirror trading, I look further afield and I look at crowd sourced funding what about crowd sourced trading? It is possible, look at the data that’s out there on Twitter and Facebook, there’s an awful lot of information there available to the general public and they could use that to create FX strategies and trade going forward. So, all of these things are happening now in the modern society, they might be teenagers or they might be in their early twenties but they’re all natural, all of these things are natural to the modern world as snap, crackle and pop was to our generation.