London Stock Exchange-listed TP ICAP Group, the world's largest interdealer broker, is launching a crypto trading platform for institutions, expanding its presence in the fledgling market. The decision follows strong demand from institutional clients.
The London-based broker has been offering Bitcoin futures since 2019. Now, TP ICAP is partnering with Fidelity Digital Assets and Standard Chartered to offer crypto transaction execution and settlement, Reuters reports. The platform has begun client registration and will launch in the second half of the year, with liquidity providers such as Flow Traders.
Legitimizing the crypto industry
London-based major bank Standard Chartered already announced a few weeks ago that they themselves will launch a separate crypto brokerage and trading platform in Europe. This is because institutional investors have increasingly turned their eyes to the crypto markets over the past year. Dedicated crypto funds, for example, have seen record inflows. Large banks have to balance growing interest with comfort, and increasing regulatory scrutiny.
TP ICAP launched Bitcoin futures and options on the CME in 2019, and now plans to launch more derivatives products, including total return swaps and non-deliverable forwards. The platform is awaiting approval from the U.K. Financial Services Authority. Neither Standard Chartered nor Fidelity Investments have invested in the platform, according to Reuters.
Post-trade infrastructure
The platform will provide post-trade infrastructure with a network of digital asset custodians and separate execution from settlement. Something that has been widely seen as key to greater participation from risk-averse investors in the emerging crypto market.
"Investor interest in this new asset class has just exploded in the last six to eight months. Most clients want the custody function separated from the execution capabilities, which is contrary to the models that currently exist." - Duncan Trenholme, co-head of crypto assets at TP ICAP
Typically, crypto execution and custody services are bundled in one place, but this increases credit risks. TP ICAP aims to prevent this from happening. The platform, which is scheduled to launch in the second half of the year, will initially enable trading in Bitcoin (BTC) - with Ethereum (ETH) to be added later.
