ICAP to launch crypto trading platform with Fidelity, Standard Chartered

Flow Traders

29/06/2021 08:00

By Saikat Chatterjee and Tom Wilson
    LONDON, June 29 (Reuters) - TP ICAP  TCAPI.L , the world's
biggest interdealer broker, is launching a cryptocurrency
trading platform with Fidelity Investments and Standard
Chartered's digital assets custody unit, the consortium said on
Tuesday.
    Institutional investors have warmed to the crypto sector
this year and the platform, which is due to launch in the second
half of the year, will initially allow them to trade bitcoin
 BTC=BTSP , with second-largest token ether  ETH=BTSP  to be
added later. 
    TP ICAP, along with Fidelity Digital Assets and Zodia
Custody, launched by the venture capital arm of Standard
Chartered  STAN.L  and Northern Trust in December, is seeking to
make crypto trading akin to that of traditional assets like
stocks, bonds and foreign exchange.
    The platform will offer post-trade infrastructure with a
network of digital asset custodians, the consortium said in a
statement, and separate execution and settlement, something
widely seen as key to greater involvement of larger risk-averse
investors in the emerging crypto market.
    At present, crypto execution and custody services are
usually rolled up in one venue, increasing credit risks.
Amsterdam-based Flow Traders will provide liquidity to the
platform. 
    TP ICAP has broadened its footprint in global capital
markets by offering new data and analytics services and rolling
out new products.
    Dedicated crypto funds have seen record flows this year but
major banks offering access must balance growing interest with
the compliance headaches long associated with the cryptocurrency
sector and increasing scrutiny by regulators.  urn:newsml:reuters.com:*:nL4N2MY28F
    Still, the move is the latest endorsement of the sector by
Standard Chartered, whose venture capital unit said earlier this
month it will set up a separate crypto brokerage and exchange
platform in Britain and Europe, with Hong Kong's BC Technology
Group  0863.HK .  urn:newsml:reuters.com:*:nL2N2NK0LN 
    "Investor interest in this new asset class has exploded
dramatically in the last six to eight months," Duncan Trenholme,
co-head of digital assets at ICAP, told Reuters. "In most of our
conversations with clients, they want a separation of custodial
roles from execution capabilities which is opposite to the
models that exist currently." 
    TP ICAP launched bitcoin futures and options on CME in 2019
and now plans to launch other derivative products including
total return swaps and non-deliverable forwards.
    The platform is awaiting approval by Britain's financial
regulator. Neither Standard Chartered nor Fidelity Investments
have invested in the platform, ICAP said.

 (Reporting by Saikat Chatterjee and Tom Wilson; Editing by
Rachel Armstrong and Kirsten Donovan)
 ((saikat.chatterjee@thomsonreuters.com; +44-20-7542-1713;
Reuters Messaging: saikat.chatterjee.reuters.com@reuters.net))