The world’s largest interdealer broker, TP ICAP, is launching a crypto trading platform in a bid to set up a wholesale electronic marketplace for spot cryptoasset trading.
The UK-based firm is working with two crypto custodians, Fidelity Digital Assets and Zodia Custody – a joint venture set up by the venture capital arm of Standard Chartered and Northern Trust.
Flow Traders, a liquidity provider specialising in crypto assets, has also been recruited for the project.
TP ICAP launched a digital assets business in 2019 offering trading for crypto derivatives and is now looking to capitalise on what it sees as the growing demand for spot trading of cryptoassets from its traditional customer base.
While institutional investors have shown a greater appetite for crypto trading in recent months, the lack of fully regulated market infrastructure and post-trade processes has held back adoption.
The consortium behind this latest platform are confident that the presence of well-established capital markets players and a traditional post-trade environment with segregation of assets and a separation between custody and execution services will serve to entice institutional clients.
“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,” said Simon Forster, co-head of digital assets at TP ICAP.
“This poses challenges from a conflict of interest perspective and results in fragmented liquidity,” he added.
The platform, which is based in London, is currently onboarding clients and is set to launch in the second half of the year by which time it hopes to add more liquidity providers and custodians.
Investors will initially be able to trade bitcoin with ether trading to be added at a later date.
