Gold-i has just announced the next generation of its Crypto Switch product. The company has added a key aspect that has been overlooked by most CFDs brokers in the new improved version of the software.
Physical clearing of cryptocurrencies compliments the CFDs offering and provides brokers with additional options.
Gold-i’s Crypto Switch 2.0, enables brokers to deliver to their clients not only CFDs, but also fully cleared cryptocurrencies. The solution enables firms to access a cost-effective and efficient channel to deliver crypto trading to its clients.
The technology provider has partnered up with FXCH to deliver the cleared physical and CFD trading product. Brokers can also hedge their crypto flow via an integration with four of the biggest global cryptocurrency market markers, B2C2, Bluefire Capital, DV Chain, and Hehmeyer.
Commenting on the company’s new product, the CEO of Gold-i, Tom Higgins, elaborated: “FXCH is a cryptocurrency clearing house – it acts like a Prime Broker does in the FX world. Using Crypto Switch 2.0, brokers can deposit funds with FXCH who becomes their counterparty and gives up the trades like a PB, managing the risk for brokers and minimizing exposure with each of the cryptocurrency market makers.”
“With Crypto SwitchTM 2.0 we have created a model for brokers to have access to both physical and CFD cryptocurrencies which can be aggregated and cleared – a model which benefits the whole Gold-i Matrix NETwork,” Higgins explained.
Crypto Prime Brokers
Tom Higgins elaborates that Gold-i’s new product can provide firms with access to previously inaccessible revenue streams for “Crypto Prime Brokers”. Those can redistribute cryptocurrency liquidity as their own.
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At the same time, market makers can benefit by getting flow into their business for their crypto trading, while Crypto exchanges get the trading from their market makers.
“It’s a scalable model on a global basis and no one else in the MetaTrader world is doing this,” said Higgins.
The second generation of Crypto Switch enables brokers using Gold-i’s MT4 and MT5 bridge products to access leading global crypto exchanges and liquidity providers for pricing and trading.
As Crypto Switch 2.0 provides a fully cleared solution, brokers only need to place funds with a single entity. This provides them with an opportunity to offer aggregated cryptocurrency liquidity to their clients and enables firms to fully hedge their crypto market risks.
Physical Crypto vs CFDs
The addition of physical trading comes at a time when brokers have seen a decline in trading of crypto CFDs. The main reasons for that are dismal volatility of cryptos over the summer and the current cap in leverage to 2:1.
As recently as Monday, the FCA has made a public announcement that it is considering an outright ban of crypto CFDs. Gold-i’s move comes just at the right time to address this new regulatory development.
Crypto CFDs remain popular and widely accessible across the globe. The new regulatory environment in Europe has not affected brokers which are operating worldwide and Gold-i is continuing to provide crypto CFDs to its clients.