TP Icap is launching a cryptocurrency trading platform for institutional investors, as part of a consortium with Fidelity Investments and Standard Chartered’s digital asset custody unit Zodia.
The new platform will include spot crypto trading for tokens including bitcoin and ether for wholesale markets, and access to custody solutions provided by Fidelity and Zodia. It will be subject to registration with the Financial Conduct Authority, TP Icap said, as part of the regulator’s temporary permissions regime for crypto-exposed businesses.
Institutional investors have been ploughing into digital assets since October last year, providing much of the bulk behind a rise in the value of cryptocurrencies since then. In 2021 several major banks have begun developing plans to offer access to the asset class, including Goldman Sachs, Morgan Stanley and BNY Mellon.
TP Icap’s co-head of digital assets Simon Forster said the separation of execution and settlement was a key requirement for many institutional investors seeking to enter the cryptoasset space, which can cause conflicts of interest if not resolved.
“Client demand to trade spot cryptoassets is significant and growing, with interest coming from our traditional customer base across the different asset classes we operate in,” Forster said in a 29 June statement.
“But to date many of our clients have been prevented from accessing cryptoasset markets due to current limitations in market infrastructure, with most execution venues requiring pre-funding and also acting as custodian.”
The world’s largest interdealer broker said its platform will launch in the second half of this year, by which time it will have additional liquidity providers alongside its founding partner Flow Traders.
It will be operated by Forster and fellow co-head Duncan Trenholme from the firm’s offices in London, with additional locations in New York and Asia in future. Launched initially in the City, the platform will be available to clients worldwide.
“Collaborating with industry leaders like TP Icap to bring to market innovative solutions that strengthen the digital assets ecosystem is critical to enabling even more institutional participation,” said Chris Tyrer, head of Fidelity’s digital assets business in Europe.
“With this new infrastructure, we’re addressing one of the frictions in the investor experience that’s unique to this nascent asset class. Now, investors can more confidently execute trades knowing their assets remain still and secure in our custody.”
StanChart is also set to launch its own digital asset brokerage and exchange platform for UK and European institutional clients later this year. Zodia is seeking similar permissions from the FCA to operate in the country, and said it expects to launch commercially in the second half of 2021.
To contact the author of this story with feedback or news, email Emily Nicolle