The announcement by TP ICAP, the world’s largest interdealer-broker, of its Fusion Digital Assets marketplace going live marks a significant moment in the history of cryptocurrency. As an established player in traditional finance, TP ICAP is bringing crypto to more institutional investors amid a bear market and following several major scandals that have cast a shadow over the industry.
Simon Forster, global co-head of Digital Assets at TP ICAP Group, is optimistic about the future of cryptocurrencies. He believes 2022 could be a year where the crypto landscape changes forever, with more people building interesting and innovative projects. However, this optimism is not without reservations as traditional finance-tailored companies face the challenge of implementing strict governance and regulatory structures before offering their services to investors.
The launch of a new crypto marketplace like Fusion Digital Assets, which aims to offer an infrastructure more familiar to institutional investors than vertically-integrated crypto exchanges, is a complex process. The company, known for its adherence to regulations and an operational structure that includes non-custodial crypto exchange, segregated custody arrangements with Fidelity Digital Assets and liquidity sources such as Flow Traders and XBTO Global, plans to add more custodians in the future to provide investors with more options.
Although the first trade on Fusion Digital Assets was a bitcoin-U.S. dollar (XBTUSD) pairs trade, the marketplace also supports ether (ETH) against USD. TP ICAP is open to expanding its offering to include other cryptocurrencies based on client demand. Since its Digital Assets arm was established in 2019, TP ICAP has made efforts to offer clients the ability to trade crypto-linked exchange-traded products (ETPs). After obtaining its UK crypto license in December, the company was able to launch the new Fusion Digital Marketplace, enabling traders in the region to take part.
There are pros and cons to the Fusion Digital Assets marketplace. While it brings the legitimacy of a traditional finance giant to the world of cryptocurrencies, it also adds additional layers of bureaucracy and complexity to the process. These strict governance and regulatory structures can both help ensure the safety of investors’ assets and potentially slow the adoption of new cryptocurrencies and features.
In conclusion, TP ICAP’s launch of Fusion Digital Assets represents a new era of cryptocurrency adoption by institutional investors. The marketplace’s strict adherence to regulations and its familiar infrastructure may help to build trust in this emerging market; however, the added complexities and restrictions could stifle innovation and growth. Only time will tell how the expansion of TP ICAP’s services will impact the crypto landscape.
Source: Coindesk
