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CME Group and Dwolla, a digital-payment network, have struck a deal that will allow the option and future exchange's participants to send and receive collateral payments in real-time throughout the trading day. The partnership will be make it possible to collect margin throughout the day, thereby increasing the safety of trading.
The development is the latest success for Dwolla, which began in 2010 as a two-person start-up in Iowa. Now the company processes more than $1 billion a year in payments and counts Andreessen Horowitz, Union Square Ventures, Thrive Capital and Village Ventures among its early investors. Bloomberg LP, the parent of Bloomberg News, is an investor in Andreessen Horowitz. The Midwest roots of both companies may have helped cement the deal, Milne said. “Maybe stylistically we get along really well with CME because of the Midwest connection,” he said. There’s also an element of being at the right place at the right time. “We have a solution from a technological perspective and they have a market need for it,” Milne said.
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