TP ICAP, the world’s biggest interdealer broker, has teamed up with liquidity providers Jane Street and Virtu Financial as it prepares to launch a crypto trading platform for institutional investors.
TP ICAP said the addition of the market makers and custody providers for the initiative will help provide clients with the tight pricing alongside a separate but interoperable model for execution and settlement.
TP ICAP’s new Digital Assets Platform, which remains subject to registration with the UK’s Financial Conduct Authority, is being developed with crypto custody providers Fidelity Digital Assets and Standard Chartered’s digital asset unit Zodia. The company has also onboarded liquidity provider Flow Traders.
The idea is to allow institutional clients to spot trade in bitcoin Bitcoin and Ethereum through a wholesale electronic over the counter (OTC) marketplace. The platform will also include post-trade infrastructure that provides straight through processing (STP) and payment netting services for executed trades into a network of digital asset custodians.
A separate but interoperable model
World’s biggest interdealer broker said the separation of execution, custody and settlement is a key requirement for the crypto platform to succeed. The reason is to better serve institutional investors who are seeking to enter the cryptoasset space, as the one-shop business model can cause conflicts of interest if not resolved.
TP ICAP was established four years ago following Tullett Prebon’s acquisition of the voice-broking business from its former rival interdealer broker ICAP. TP ICAP’s data and analytics division is a provider of real-time price information from the global OTC financial and commodity markets, covering data from the wholesale inter-dealer brokered financial markets.
“For crypto assets to have a meaningful and broad adoption in capital markets across participants, there need to be top-tier platforms that address the needs of institutional participants. The launch of TP ICAP’s Digital Assets Spot Platform is an exciting partnership opportunity for Virtu as it does that and is among the first of its kind. Clients can leverage the platform’s institutional-grade protocols, TP ICAP’s long standing presence in capital markets and firms’ like Virtu’s experience as leading global market makers to integrate liquidity of digital assets into a trusted and familiar trading format,” said Laine Litman of US electronic market maker, Virtu Financial Inc.
Virtu makes markets with over 25,000 financial instruments, at more than 235 venues, in 36 countries worldwide, continuously quoting buy and sell prices for others to trade against, profiting off the bid-offer spread and using high-frequency trading (HFT) strategies.
“TP ICAP has long standing relationships across multiple asset classes with both Jane Street and Virtu. We have been working with the Digital Assets teams of these businesses for some time so bringing their expertise and spot liquidity into our ecosystem is a natural evolution that reflects our shared commitment to this asset class. Having another two blue chip market makers on board at launch will help provide competitive and deep liquidity to our global network of clients who are looking to engage in crypto assets for the first time,“ added Simon Forster, Co-Head of Digital Assets at TP ICAP.