This article comes fromThe Blocksecondary title

Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- TC ICAP has launched a series of crypto-related exchange-traded products (ETPs) for its European clients.

- It has made its first deal with Wall Street giant Goldman Sachs.

TP ICAP, the world's largest inter-dealer brokerage, said on Monday it has launched a crypto-related exchange-traded product (ETP) for its European clients, another sign of the growing mainstream acceptance of digital assets.

Simon Forster and Duncan Trenholme, co-heads of digital assets at TP ICAP, said the firm, which facilitates trades between investment banks, hedge funds and other large financial institutions, has been trading in Europe for clients including Goldman Sachs, Flow Traders and Jane Street.

Trading stock-related products on an exchange may be the easiest way for clients to adapt to digital assets, Forster said, adding that the firm has been actively trading ETPs such as ETC Group's physical bitcoin product BTCE.

The broker is responding to growing institutional client demand for digital assets, and it's not alone in doing so. UBS, Goldman Sachs and Bank of America are reportedly clearing and settling cryptocurrency ETPs for European hedge fund clients.

Liquidity in some ETP products is currently "relatively modest," Forster said. He expects that as more institutional money enters the space, the number of products will increase and the overall market will expand.

Specifically, TP ICAP has conducted its first crypto transaction with Goldman Sachs. It trades ETC Group Physical Bitcoin as CME Bitcoin Futures, a physically backed equity instrument traded on Xetra. DRW, Flow Traders and Jane Street provided liquidity.

These ETPs are a way for companies to gain exposure to crypto assets without having direct exposure to them.

Trenholme told The Block that TP ICAP has had a cryptocurrency working group since 2017 and first provided liquidity to clients of CME’s cryptocurrency products in 2019.

In the coming months, the company will look to launch an exchange-traded fund (ETF) in the United States.

"It was a natural evolution for us, in line with the needs of our customers," Forster said.

TP ICAP's 2022 focus is on the launch of its spot trading platform, which will allow customers to trade physical bitcoin for the first time. This is a tool for liquidating products using an external custodian.

Meanwhile, the firm is also exploring over-the-counter (OTC) derivatives such as swaps and OTC options.

The new product will comply with the Financial Conduct Authority Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) registration requirements.

“Once we do that, we will have a good time to launch a spot platform,” Trenholme said. He further added that the company plans to conduct spot trading in the second quarter, and OTC derivatives trading will follow internal approvals and customer demand.