With a platform that separates custody and execution roles, TP ICAP hopes to attract the largest investors to Bitcoin trading.
TP ICAP, the world’s largest interdealer broker, will launch a bitcoin trading platform this year in collaboration with Fidelity Digital Assets and Zodia Custody.
“Investors have exploded dramatically in this new asset class over the last six to eight months,” says Duncan Trenholme, co-head of TP ICAP’s digital assets. “In most of our conversations with clients, they want to separate custodial roles from performance capacities, which is the opposite of the existing model that we are currently creating or providing.s
“TP ICAP, Fidelity, and Standard Chartered Zodia’s Bitcoin Custody Unit want to make bitcoin trading more similar to traditional trade assets like stocks, bonds, and currency.
The Concept targets risk-averse investors
The platform, which is set to launch in the second half of 2021, aims to attract more risk-averse investors to the Bitcoin trading market by separating trading and settlement and providing a network of bitcoin custodians with post-trade infrastructure. Because Bitcoin execution and custody are typically provided by the same institution, credit risks are currently higher.
Flow Traders, a liquidity provider based in Amsterdam, is awaiting approval from the UK Financial Conduct Authority. Liquidity will be provided to the platform. TP ICAP is the world’s largest interdealer broker in the financial, energy, and commodities sectors. It connects buyers and sellers in global markets like wholesale, over-the-counter, and trading.
It also claims that its participation in global markets facilitates price discovery, liquidity flow, implementation, and risk management. In turn, Fidelity Digital Assets is a fidelity investment subsidiary that offers institutional investors Bitcoin solutions such as business-grade custody and delivery services.
Fidelity filed for a Bitcoin exchange-traded fund with the Securities and Exchange Commission in March, and a month later joined a trading group to lobby policymakers for favourable Bitcoin regulation.
The platform’s final participant, Zodia Custody, was formed by a collaboration between Northern Trust and SC Ventures, an international bank unit of Standard Chartered. Zodia aims to connect the banking and technology sectors by offering institutional investors bitcoin custody solutions.
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