OTC Exchange Network (OTCXN), a blockchain-powered capital markets infrastructure company, today announced that it completed its first live test trades for the exchange of tokenised fiat currency and bitcoin.
The infrastructure provider says that it believes this to be the first time that tokenised US dollars and tokenised bitcoin have been exchanges between two separate trading accounts over an electronic trading platform with assets held in safekeeping at a neutral custodian and digitised on blockchain.
Currently, institutional traders usually conduct block trades of fiat currency and cryptocurrency over e-mail and chat, relying on the reputation and credibility of their counterparties to honor their part of the trades, often taking hours to confirm and settle. The OTCXN platform aims to remove trading counterparty and settlement risk with an atomic exchange of assets on high-performance blockchain and facilitates settlement of transactions instantly, not in hours or days.
David Mercer, CEO of LMAX Exchange, talks about why a lack of credit, rather than custody solutions, is the biggest single challenge facing institutional market participants wanting to trade cryptoassets.
LMAX offers a crypto custody solution through LMAX Digital, and Mercer concedes that having platforms provide custody services is not necessarily ideal from a market structure perspective.
However, he quickly adds: If you look at LMAX Exchange’s business model I’ve always been regulated as a broker-dealer and I’ve alway been regulated as an MTF and there’s Chinese Walls between the two.
Cinnober, a provider of exchange technology, and BitGo, which offers institutional-grade cryptocurrency security, are collaborating to provide solutions to cryptocurrency exchanges.
BitGo’s wallet solution will expand Cinnober’s trading and post-trade platform with the aim of providing an end-to-end, secure, institutional-grade digital asset exchange solution.
Through the collaboration with BitGo, Cinnober claims that it is consolidating its offering to cryptocurrency exchanges in need of a high-performance trading solution to handle increasing market volumes, expectations from institutional investors and requirements from regulators. BitGo’s wallets and custodial solutions include security key management, multi-signature setups, setting of procedures and client-driven policies to ensure assets are held in a highly secure environment.
Kingdom Trust, which provides custody services for digital asset investments, has secured insurance for digital assets held on its qualified custody platform through Lloyd’s of London.
“Qualified custody by a regulated, insured financial institution is a top priority and critical hurdle for institutions to invest in the digital asset markets,” says Matt Jennings, CEO of Kingdom Trust. “By adding another trusted specialist like Lloyd’s to our platform, we’re ensuring that current and future clients will have access to a highly secure, complete safekeeping solution tailored to meet the challenges of institutional finance.”