TP ICAP, the world’s largest interdealer broker, has announced the launch of Fusion Digital Assets, its wholesale cryptoasset exchange, powered by trading and post-trade technology from GMEX Technologies, the subsidiary of GMEX Group that specialises in digital business and technology solutions for capital markets firms, exchanges and post-trade market infrastructure. The Fusion Digital Assets platform has now successfully completed its first XBTUSD pairs trade, with settlement processed by Fidelity Digital Assets.Fusion Digital Assets, registered as a cryptoasset exchange provider with the UK’s Financial Conduct Authority (FCA) in November 2022, is a trading venue that exclusively targets institutional market participants. The exchange, which has launched with an electronic marketplace for spot cryptoasset trading in Bitcoin and Ethereum, sets itself apart from existing cryptoasset markets by aligning with traditional financial markets through its segregated operational structure, enabling independent providers to carry out specific roles covering trade execution, custody, and settlement.
The platform integrates GMEX’s advanced exchange trading and market surveillance solutions, along with key components of the GMEX Fusion digital technology suite, used by numerous regulated financial institutions around the world. GMEX is also providing a new post-trade platform that is able to link multiple digital asset custodians, the first of which is Fidelity Digital Assets.
“All the different custodians have different business logic, and we’ve encapsulated that into a normalised REST API,” says Hirander Misra, CEO of GMEX Group and Chairman of GMEX Technologies, talking to TradingTech Insight. “The assets held at the custodian as collateral are reflected upstream as a credit for clients, and that credit is allocated to be made available for the trade, which means the asset isn’t moving on chain and off chain all the time. Real time netting takes place, then at a given point in time, there’s net settlement where there’s an on chain movement at the custodian level.”
He continues: “By doing it this way, you can trade a lot in terms of volume at very low latency, and liquidity providers are very adept connecting via API to do that. And by only having a net movement, it limits what you’re doing on chain, which is also efficient from an energy perspective.”
Misra’s view is that both APIs and the multi-blockchain approach are equally important. “Many institutions want access to the asset class, but they don’t want to run blockchain nodes and they don’t want to be on chain,” he says. “So you have to be able to facilitate both participants that are on chain and crypto or digital assets savvy, and those who don’t want to be messing around with blockchain but want to integrate into their existing systems using APIs. That’s our sweet spot.”
Duncan Trenholme, Co-Head of Digital Assets at TP ICAP, expressed his thoughts on the new platform: “Institutional demand to trade spot cryptoassets is significant and growing. Our partnership with GMEX, and the resulting Fusion Digital Assets platform, is a natural evolution in market structure that will make digital assets more accessible for wholesale market clients who want to be able to trade, invest and safely access this growing area of the market.”
Simon Forster, Co-Head of Digital Assets at TP ICAP, is optimistic about the new platform: “We are excited to be live with Fusion Digital Assets, a solution we believe the market needs. The venue provides the fundamental operational structure and governing principles that clients recognise and expect, but which have been largely missing from the market until now. Combining independent and segregated custody with an FCA-registered cryptoasset exchange helps to shape the future of cryptoasset market infrastructure. Add TP ICAPs liquidity and distribution capabilities and we are uniquely positioned to service clients’ needs. The first live trade is another milestone for our business, and we look forward to enhancing product functionality from here.”
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