TP ICAP, the largest interdealer broker, is launching cryptocurrency spot trading services with a wholesale electronic marketplace and has partnered with Fidelity Digital Assets, Standard Chartered’s Zodia Custody, and Flow Traders.
Announced on Tuesday, the platforms will offer connectivity and post-trade infrastructure into a network of digital assets custodians. Fidelity and Zodia are two digital asset custodians already tapped for the service. Flow Traders, on the other hand, is the only liquidity provider, but TP ICAP is determined to expand this number.
TP ICAP will also offer a separate execution and settlement for the crypto trading, which is a key requirement of institutional clients. The platforms will initially offer trading only with Bitcoin and later adding Ethereum too.
The platform, which will be licensed by the UK’s Financial Conduct Authority (FCA), is expected to be launched in the second half of 2021 and the company has already started to onboard clients.
Institutions Want Crypto
The interdealer broker already entered the crypto arena in 2019 by offering crypto derivatives. Its latest move into crypto spot trading came when the institutional demand for such services is skyrocketing. Banks, asset managers, and hedge funds, all want to get exposure to digital currencies.
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“Client demand to trade spot crypto assets is significant and growing, with interest coming from our traditional customer base across the different asset classes we operate in,” said Simon Forster, Co-Head of Digital Assets at TP ICAP.
“But to date, many of our clients have been prevented from accessing crypto asset markets due to current limitations in market infrastructure, with most execution venues requiring pre-funding and also acting as custodian. This poses challenges from a conflict of interest perspective and results in fragmented liquidity. Our partnership, and resultant new platform, is a natural evolution in market structure that will make digital assets, such as Bitcoin, more accessible for the wholesale market.”
TP ICAP custodian partner, Standard Chartered is also launching an institutional spot crypto trading venue in Europe.
The announcement detailed that TP ICAP will run its crypto business from London and New York. It has further plans to expand the new services to Asia as well.
“This platform will provide our global client base with the trading infrastructure, connectivity, surveillance, and market standards they require as a minimum across traditional markets whilst also recognizing the nuances of this new asset class,” Andrew Polydor, Global Head of Markets at TP ICAP, said.