London-based interdealer broker TP ICAP is entering the cryptocurrency markets according to a report published by Bloomberg on Monday.
The firm is going to be acting as an intermediary for clients looking to buy and sell futures in bitcoin – the largest cryptocurrency by market capitalization.
Bloomberg also reported that the broker plans on adding non-deliverable forwards in bitcoin over the coming months.
As of now, TP ICAP has one cryptocurrency trading desk in London. If things go well, however, they are likely to open one in the US and another in Asia.
The new business will be run by Simon Forster and Duncan Trenholme, the broker’s co-heads of digital assets.
“We want to be close to what’s happening within this nascent asset class because we believe it’s important to invest in the early stages of a growing market,’’ said Forster.
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“TP ICAP also understands that this technology could disrupt or impact other asset classes where we currently operate, so we feel it’s important to be informed.”
More to come?
Clients who want to access TP ICAP’s new service will have to go through rigorous anti-money laundering and identity checks.
The broker will also be trading its futures contracts on the CME Group’s regulated exchange. That will mean TP ICAP’s team will not have to delve into the underlying cryptocurrency market and risk regulatory punishment.
According to Bloomberg, the firm is also exploring other digital assets it could start offering to clients. Despite the risks involved, the interdealer broker is apparently also considering dealing in the underlying market.
“Every institution is on an educational journey,” said Trenholme. “Many are exploring how tokens can legitimately be traded or stored and I’d expect more projects to hit the market over the next year or two.”