State Street, the second oldest bank in the US after The Bank of New York Mellon, plans to launch crypto trading. A report broke this news on April 8, noting that the financial group intends to join Pure Digital, a London-based FinTech startup that seeks to become the main institutional platform for BTC. This partnership will reportedly see companies build an institution-centric crypto trading platform.
According to the report, the platform will allow investors to trade various cryptocurrencies through their existing bank accounts. The duo hope to accomplish this feat by integrating technology provided by State Street’s Currenex business technology division. According to State Street, the new platform is scheduled to go live in mid-2021 on an unspecified date.
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According to Digital CEO Lauren Kiley, the startup has several banks that have signed up to this deal in addition to State Street; more are in the process of incorporation. They had received a wake-up call and can no longer ignore cryptocurrencies. He went on to say that banks have to find a way to jump on the crypto bandwagon and offer products and services that meet customer demand or they will soon become irrelevant.
Transforming the crypto space to accommodate institutions
According to Pure Digital founder Campbell Adams, crypto-verse needs to mature. To unlock this feat, Adams believes the space needs institutions with large balance sheets to engage in the price-making process. He went on to point out that the primary market does not exist and that the explosion of multiple exchanges with variable rules creates fragmented market data.
To address these issues, Pure Digital and State Street plan to exchange the FX infrastructure with a bank-led group and platform comprising FX industry standard APIs. Unlike conventional crypto exchanges, Pure Digital intends to build an over-the-counter (OTC) platform with two-sided lines of credit and full transparency. Through this platform, Pure Digital believes that leading banks will be able to assess who they are working with, giving them the option of activating or deactivating counterparties as they please.
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