In a recent development, institutional crypto exchange, EDX Markets, publicized its collaboration with Anchorage Digital, a regulated crypto platform renowned for its financial services and infrastructure solutions. EDX has entrusted Anchorage with the role of a custody provider for its forthcoming venture, EDX Clearing, which is due to come to life later this year.
Significantly, Jamil Nazarali, CEO of EDX, emphasized his commitment towards alternatively introducing the influential structures of traditional finance into the digital asset landscape. Praise was heaped upon Anchorage for its robust security, governance, risk, and compliance framework, which is believed will meet the needs of their institutional clientele at a premier level.
A clearinghouse like EDX Clearing functions as a central intermediary, ensuring the integrity and efficiency of trade settlements. This move also paves the way for institutions, offering a shielded environment for their investments through minimized counterparty risk and streamlined transaction procedures. EDX’s move might be seen as an attempt to further impress the US regulators.
It also poses a pertinent question: Is Coinbase at risk? Interestingly, most notable competitors like Coinbase operate exchange, custody and settlement all under one roof. However, the collapse of FTX last year has propelled a shift in perspective towards a centralized business model, primarily due to amplified regulatory scrutiny and dwindling investor trust.
By delineating the roles of exchange and custody in line with traditional finance, EDX could be seen as declaring itself a crypto industry frontrunner anticipating an increased market share, especially as institutional participation in the crypto space grows.
The optimized trade settlements offered by EDX Clearing aspire to enhance both capital and operational efficiency. It is distinct from the usual crypto exchanges, operating in a structure more akin to traditional financial marketplaces. Anchorage Digital Bank provides protective custody for the assets of EDX Clearing’s members, creating a secure trading environment.
In light of all this, it is apparent that the collaboration between EDX and Anchorage could certainly be the first step towards unifying the benefits of standard financial markets with the potential of the crypto universe.
Anchorage, as the sole regulated chartered crypto bank, after its peer companies were compelled to suspend operations, enjoys a formidable reputation in the US. Hence, the association with Anchorage might provide EDX with the much-needed impetus to make its clearinghouse venture a success.
Synthesizing conventional financial practices with crypto seems to be the course EDX Markets and Anchorage Digital are charting, viewing this fusion as pivotal for the future growth of institutional crypto. As a part of this endeavor, the association is geared to catalyze a secure crypto market.
When quizzed by Cryptonews.com on the potential competitive risk this EDX’s move might pose to its business, Coinbase refrained from comment. Can we then infer the emergence of a fresh rivalry in the crypto domain? Only time will tell.