Charles Schwab and Fidelity will collaborate with market makers in order to create a crypto trading platform.
Two of the biggest names in traditional finance could launch a crypto platform in the upcoming months.
It would be another significant milestone for the cryptocurrency industry in easing the accessibility of digital assets to mainstream investors. Charles Schwab and Fidelity Investments are collaborating with Virtu Financial and Citadel Securities as market makers in progressing this crypto trading platform as early as late this year or early 2023. The U.S market makers industry leaders are said to ensure that the platform is efficient, transparent, and secure. It shall fall within agreed-upon standards and practices. The entry of traditional mainstream investors guarantees that the trading ecosystem has efficient access to an extensive liquidity pool in the cryptocurrency industry.
Speculation surrounding the Crypto Trading Platform
Crypto Lists sought after statements from each of the brokerages to gain deep insight into the developments. Mayura Hooper, a representative of Schwab, avoided any mention of the crypto trading platform but highlighted that the brokerage is taking on a new crypto initiative. The spokeswoman noted that Charles Schwab is developing a minority, passive strategic outlay in a digital asset venture. She spoke of the awareness of the company on the significant interest in the cryptocurrency industry. It aligns with the company’s policy. The policy of investing in projects and technologies to provide broader access is an area of interest. It is in regulatory focus with a secure environment. Fidelity Investments spokeswoman, Susan Coburn, could also not confirm the company’s participation in the proposed venture. She backed the firm’s stance on its commitment to cryptocurrency and other digital assets.
She reiterated that Fidelity Investments backs efforts to enhance the digital assets marketplace. It sets to provide more options in sourcing liquidity from investors. Virtu Financial is yet to release a statement in regards to the venture. Generally, there is limited information on the details of the venture with several sources preferring to be anonymous due to the privacy of the process. However, this news follows Citadel Securities’ announcement on building a crypto trading platform. Citadel Securities’ CEO, Ken Griffin, reversed his pessimistic view on the digital asset class by announcing the plans. He admits that he has been wrong on his previous crypto calls and has to assist investors to solve their portfolio allocation. It is why the company is considering being a market maker in crypto. The billionaire and hedge fund manager hinted that the company is collaborating with Virtu Financial, the high-frequency trading firm, in building the platform. There is speculation that Citadel Securities is also working with crypto venture capital firm Paradigm and the general venture capital firm Sequoia Capital.
This expected move is welcome, especially by mainstream investors. At present, the options are limited to crypto exchanges and brokerage apps. These include crypto exchanges such as FTX, Coinbase, Binance, and Kucoin. Some exchanges require technical expertise. Trading platforms and brokerage apps such as PayPal and Robinhood are growing popular too. PayPal only recently enabled crypto withdrawal off its platform, even if many exchanges allow deposits with Paypal. It has broadened the alternative and with ease of access too.
Crypto Future with the leading Finance Giants
Several participants of this venture view it as a natural progression of their digital assets and crypto plans. Schwab provides access to crypto through Bitcoin futures and plenty of crypto-oriented trusts. These details are available to investors over the counter but are limited as it does not support direct crypto trading on its platform. The proposed venture will not have significant changes to this since there are no urgent plans to have crypto trading. The company is still speculating on policymakers’ decisions on the regulation of the industry.
Fidelity Investments has already impacted the cryptocurrency industry with plans to provide access to Bitcoin in line with its 401(k) plans. The investment firm also offers exposure to crypto to retail clients. It is through thematic exchange-traded funds. However, like Schwab, it does not facilitate direct crypto trading on its platform. The company began crypto mining way ahead of its financial services peers. It has adopted crypto into the organisation culture by offering employee retirement plans via Bitcoin on their investments. The company is also conducting a hiring spree for individual masterminds of the cryptocurrency industry. It wishes to expand the FidelityDigital Assets branch. The current workforce in the branch is nearly 200 with expected new acquisitions of up to 210.
There is increasing interest in streamlining access to cryptocurrencies. More recently, Paxos launched a crypto trading platform for broker-dealers. It includes a set of technological interfaces that allow advisers to trade crypto on behalf of their clients. Paxos has initially partnered with Interactive Brokers to provide custody services to financial advisors. Brokers who do not offer a convenient platform to purchase crypto could lose out on investor allocations.
Crypto Lists will keep tabs on the developments of this strong argument for the cryptocurrency industry.