In an announcement on Tuesday, financial heavyweight firms including Charles Schwab, Citadel, and Fidelity investments announced plans to launch a new cryptocurrency exchange, EDX Markets. Despite the recent market fluctuations in the crypto industry this year, Wall Street continues to see the various opportunities digital assets and cryptocurrencies present.
For a long time, people considered ownership of digital assets to be complicated, primarily due to the strict rules surrounding private keys and mode of custody. EDXM intends to serve individuals and institutional investors by providing investors with a safe entry point to crypto.
According to its press release, the exchange will “address the latent demand for digital trading assets by enabling regulatory compliant and safe trading of digital assets through trusted intermediaries.”
EDMX aims to provide investors with an efficient and highly liquid cryptocurrency ecosystem by aggregating liquidity from multiple market makers. This will, in turn, result in better price discovery, and investors can also expect better prices than those offered by other crypto platforms.
This news comes amid the continuing effort by traditional financial institutions to explore digital assets. For instance, BlackRock, one of the largest asset managers, announced its intention to offer its clients an opportunity to invest in digital assets last month.
According to a comment by one of EDMX’s board of directors, “Cryptocurrency is a $1 trillion asset class with over 300 million participants and pent-up demand from millions more. Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.”
The press release referred to EDMX as “The first-of-its-kind exchange,” noting that the exchange will leverage technology provided by Members Exchange (MEMX) to secure fast and efficient trading on the platform. MEMX is an innovative and customer-centric market operator founded in 2019 by a consortium of financial firms, including those supporting EDMX.
With the technological infrastructure of EDMX built using scalable exchange architecture, EDMX will serve the needs of the world’s most sophisticated and prominent financial institutions.
Since regulatory compliance and customer security are core principles of EDMX, EDX noted that the exchange would operate as a fully independent entity separate from the entities aiding its launch or trading on it to avoid conflict of interest expected in existing crypto exchanges.
Other project backers include Sequoia Capital, Virtu Financial, and Paradigm. In addition, the group expects more market participants to partner with the exchange over time.
Although the press release did not expressly state the project’s expected launch date, it named its leadership team. This team comprises Jamil Nazarali, a longtime senior executive at Citadel Securities, as CEO of the exchange; Tony Acuña-Rohter, as Chief Technology Officer (CTO); and David Forman, as General Counsel.
The group also mentioned that the exchange would hire many more people across the traditional financial sector and the crypto industry. The board of directors of EDMX is representative of the founding member firms.