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StoneX conducts first Bitcoin swap as company looks to increase crypto trading
The derivative was a cash-settled US dollar-denominated Bitcoin swap It's the first step in building a growing crypto business that would likely include market making Derivatives specialist StoneX Group has executed its first US dollar-denominated Bitcoin swap, joining a growing cadre of established financial players making initial forays into the crypto markets undertake. A subsidiary, StoneX Markets, made the cash-settled swaps — derivative contracts that exchange two financial instruments at a specified time — available to customers earlier this month, a company executive told Blockworks. The counterparty to the trade was Liquidity Solutions Global, a subsidiary of London-based DriveWealth...
StoneX conducts first Bitcoin swap as company looks to increase crypto trading
- Das Derivat war ein auf US-Dollar lautender Bitcoin-Swap mit Barausgleich
- Es ist der erste Schritt zum Aufbau eines wachsenden Krypto-Geschäftszweigs, der wahrscheinlich Market-Making beinhalten würde
Derivatives specialist StoneX Group has executed its first US dollar-denominated Bitcoin swap, joining a growing cadre of established financial players making their first forays into crypto markets.
A subsidiary, StoneX Markets, made the cash-settled swaps — derivative contracts that exchange two financial instruments at a specified time — available to customers earlier this month, a company executive told Blockworks.
The counterparty to the trade was Liquidity Solutions Global, a subsidiary of London-based DriveWealth Holdings, which provides liquidity for digital assets.
For StoneX, which has been exploring the digital assets space for years, the move is the first step toward building an institutional-level crypto ledger, Eric Donovan, the company's global head of institutional FX trading, told Blockworks.
The expansion, which StoneX later sees as a viable revenue stream, will likely include the launch of a spot crypto trading product that will act as a market maker and provide liquidity to institutions, including hedge funds, to trade digital assets. The company could partner with a major crypto custodian to hold its customer assets.
The financial services company was already acting as a fiat offramp for crypto companies that were excluded from the traditional banking system due to regulatory issues, Donovan said. This includes providing forex trading for currencies worldwide. Digital asset exchanges, for example, accept currencies around the world but prefer to keep dollars and euros on their balance sheets – making conversion at a decent exchange rate a must.
“The place we have in the market is that if you look at a multi-asset advisor or a multi-asset fund, they may be invested in stocks,” Donovan said. "They can be in commodities. And they want some exposure to crypto. We think that's a huge growth area."
StoneX joins other Wall Street players, including Goldman Sachs, in building in-house crypto trading operations. Goldman has both made a Bitcoin-backed loan and traded non-deliverable Bitcoin options.
For StoneX, part of the delay was waiting for ample liquidity in the digital asset options markets. In addition to offering derivatives on other cryptocurrencies, including Ether, the company will look to trade so-called "crosses" or exchanges between digital assets in the future - or digital currencies to fiat and vice versa, Donovan said.
“Crypto isn’t just in the United States,” he said. "It's all over the world. And we need to be able to denominate assets against any other fiat currency in the world."
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The post StoneX Conducts First Bitcoin Swap as Company Looks to Expand Crypto Trading is not financial advice.