Providing virtual currency spot trading to institutional investors
TP ICAP, one of the world’s leading inter-dealer brokers (IDBs), announced on the 24th that it has launched “Fusion Digital Assets”, a spot trading market for crypto assets (virtual currencies).
Today we have announced that Fusion Digital Assets, our marketplace for spot cryptoassets, is live & has successfully completed its first trade, with the associated settlement processed by @DigitalAssets
Read more here: https://t.co/5Un194NDmE #digitalassets #digiassets pic.twitter.com/cdK0sSJvFk
—TP ICAP Group PLC (@TPICAPGroupPLC) May 24, 2023
“Fusion Digital Assets” will be a trading platform for institutional investors only. As the first trade, the Bitcoin (BTC) and US dollar pair trading was also reportedly completed.
It currently offers USD/Bitcoin and USD/Ethereum (ETH) trading. In the future, we plan to expand the assets we handle according to customer demand.
What is an Inter Dealer Broker (IDB)?
A specialized financial product intermediary (broker) that deals in over-the-counter derivatives that are traded through a specialized broker.
Adopting a segregated operating model
Simon Forster, Global Head of Digital Assets at TP ICAP Group, commented:
The trading platform operates with a structure and management principles that have so far been lacking in the cryptocurrency market, while clients have come to expect it.
The combination of separate management of customer assets by an independent institution and a cryptocurrency exchange registered with financial authorities is advanced in the cryptocurrency market.
As Forster explained, Fusion Digital Assets is unique in that each function is handled by an independent provider.
First, for trading, TP ICAP provides clients with virtual currency exchange services such as order matching and trade execution on its own platform.
Second, for custody, Fidelity Digital Assets provides independent and secure custody of client assets and also provides payment services. Liquidity will be supplied by various global liquidity providers such as Flow Traders and XBTO Global, as well as TP ICAP’s global customer base.
TP ICAP will be licensed as a cryptocurrency trading operator by the UK’s Financial Conduct Authority (FCA) in late 2022.
Unlike traditional financial companies, cryptocurrency exchanges often play a variety of roles such as transaction brokerage, settlement, asset custody (custody), and credit provision. Some have pointed out the risk of concentration in this regard, especially after the FTX bankruptcy.
Major cryptocurrency exchange Binance is also reportedly considering collateralizing some of its customer funds with third-party banks.
connection: Binance, considering a mechanism to deposit collateral funds of some customers in a bank = report
Handles cryptocurrency-related ETP
TP ICAP established a digital assets division in 2019. In January 2022, it will also start handling virtual currency-related ETPs (listed trading financial products) for European customers.
connection: A major interdealer broker starts handling cryptocurrency ETP in Europe