TP ICAP wants to attract larger investors to bitcoin trading with a platform that separates custody and execution roles.
TP ICAP, the world’s largest interdealer broker, will launch a bitcoin trading platform in partnership with Fidelity Digital Assets and Zodia Custody later this year, reported Deal Street Asia.
“Investor interest in this new asset class has exploded dramatically in the last six to eight months,” said Duncan Trenholme, co-head of digital assets at TP ICAP, per the report. “In most of our conversations with clients, they want a separation of custodial roles from execution capabilities which is the opposite to the models that exist currently.”
TP ICAP, Fidelity and Standard Chartered’s bitcoin custody unit Zodia want to make bitcoin trading more similar to trading traditional assets such as stocks, bonds and foreign exchange.
The platform, which is set to launch in the second half of 2021, reportedly seeks to attract more prominent risk-averse investors into the bitcoin trading market by separating trade execution and settlement and offering post-trade infrastructure with a network of bitcoin custodians. Credit risks are currently increased because the same institution usually provides bitcoin execution and custody services.
Flow Traders, an Amsterdam-based liquidity provider, will be in charge of providing liquidity to the platform, which is currently awaiting approval by Britain’s financial regulator.
TP ICAP is the world’s biggest interdealer broker, active across financial, energy and commodities asset classes. The firm operates in global, wholesale, over-the-counter and exchange-traded markets, matching buyers and sellers. And it claims the role it plays facilitates price discovery, the flow of liquidity, execution and risk management in global markets.
Fidelity Digital Assets, in turn, is a subsidiary of Fidelity Investments and provides bitcoin solutions for institutional investors, including enterprise-grade custody and execution services. In March, Fidelity filed for a bitcoin exchange-traded fund with the U.S. Securities and Exchange Commission and joined a trade group one month later to lobby policymakers for favorable Bitcoin regulation.
The final participant in the platform, Zodia Custody, was born from a partnership formed in December between Northern Trust and SC Ventures, a unit of international bank Standard Chartered. Therefore, Zodia aims to bridge the banking sector with the technology sector by providing bitcoin custody solutions for institutional investors.