- TradFi giant TP ICAP gains UK crypto trading license
- Fusion Digital Assets aims to offer a platform for matching crypto spot orders and executing trades.
- Financial firms are going big on crypto and tokenization, with BlackRock CEO saying “Crypto is still relevant for the future post-FTX.”
The world’s largest interdealer-broker, TP ICAP, has registered as a digital asset provider with the U.K.’s Financial Conduct Authority (FCA), making for yet another foray into the crypto world, only this time with its Fusion Digital Assets marketplace. In a Twitter post by TP ICAP Group PLC:
“Fusion Digital Assets, our wholesale marketplace for spot crypto assets, has successfully registered as a crypto asset exchange provider with the U.K.’s Financial Conduct Authority (FCA).”
TP ICAP, a behemoth in infrastructure for wholesale markets for traditional finance, is collaborating with custodian Fidelity Digital Assets to provide a platform for order matching and executing spot cryptocurrency trades.
Speaking on the development, co-head of digital assets at TP IPAC Group Duncan Trenholme said, “Until now, the wholesale digital-assets market has lacked the credible infrastructure and assurance necessary for [financial market players] to allocate capital,” adding, “Over time, we believe blockchain will lead to the tokenization of traditional asset classes.”
TP ICAP has been on the FCA’s cryptocurrency company registry since November 21 under its full name- Tullett Prebon (Europe) Ltd, which is evidence that the company is compliant with anti-money-laundering regulations. Notably, the U.K. Treasury is considering a more comprehensive legal regime for cryptocurrency authorizations.
In January, TP ICAP announced it was offering clients, including investment banks, the opportunity to trade crypto-linked products on its exchanges.
Financial Companies Doubling Down on Crypto and Tokenization
Tokenization entails converting physical goods into digital tokens tradable on a blockchain. It is the process of transferring asset ownership rights as digital tokens into a blockchain. A user can tokenize real-life commodities like precious metals, real estate, and art, among other items, or intangible assets, including but not limited to intellectual property. One may also tokenize financial instruments like bonds and stocks.
Many financial institutions have demonstrated interest in asset tokenization, as it makes it easier to invest in and trade the assets in question, thereby helping to make the market more liquid. Among them is BlackRock, the largest asset manager in the world. By tokenizing an investment, investors can directly own a fraction of the underlying real-world asset without having to purchase or manage the entire underlying asset.
BlackRock is All in Crypto
BlackRock’s Larry Fink has said that crypto technology is still relevant for the future despite the collapse of crypto exchange FTX, but acknowledged that there might have been “misbehaviors of major consequences” by FTX. The CEO of the world’s largest asset manager made these comments during an event hosted by the New York Times DealBook.
In his statement, Fink also opined, “We are going to have to wait to see how this all plays out,” adding that most crypto firms will not exist in the future. He also revealed that this firm, which manages around $8.5 trillion worth of assets, had invested up to $25 million in the now-dysfunctional FTX. Noteworthy, this investment was made through a billionaire fund under BlackRock.
Despite the exposure, however, Fink remains bullish on crypto and the technology behind it, saying :
“I believe the next generation for markets and securities will be tokenization of securities.”
Meanwhile, the popularity of crypto and blockchains among leading financial firms attest to the industry’s strength, with tokenization becoming an exciting aspect. In a statement, the head of BlackRock’s business across Europe, the Middle East, and Africa, Stephen Cohen, said, “tokenization is about trying to give more people access to investments. “
Cohen also highlighted that BlackRock has just started looking for opportunities in digital assets, with its Aladdin platform at the core of BlackRock’s foray into digital assets in the U.S. Among BlackRock’s Aladdin platform clients are banks, pension funds, insurance companies, and other asset managers.
Moreover, through connectivity with Coinbase Prime, institutional clients can now access the digital asset market courtesy of the August 2022 collaboration between BlackRock and Coinbase.
Head of BlackRock Investment Institute Jean Boivin has called out for a new playbook, saying, “What worked for investors in the past will not work now.” This is in light of the company’s newly released 2023 Global Investment Outlook that guides BlackRock into a “new, more volatile regime – driven by production constraints.” According to Boivin, the company expects to turn more positively on risk assets in 2023.
