Infrastructure Launched For Trading Digital Assets
In London in 1698 John Castaing started to issue a detailed list of market prices called The Course of The Exchange and Other Things from his base at Jonathan’s Coffee House every Tuesday & Friday. Today Quantave is aiming to launch infrastructure which provides connectivity and liquidity aggregation for institutions to trade digital assets as volumes have grown to more than $2bn (€1.8bn) per day.
Paul Gordon, chief executive of Quantave, told Markets Media: “Other consortiums and private blockchain initiatives are focused on digitising existing assets which will evolve over time. Our assumption is that dedicated digital assets require an improved exchange infrastructure.”
Gordon said the existing infrastructure for trading digital assets has been unsuitable for institutional investors as accessing multiple venues has required separate onboarding and capital management processes, and they have not been able to aggregate liquidity. Quantave aims to allow investors to across multiple venues through independent asset safeguarding and execution functions.
“We wanted to address the inefficiencies in the digital asset market through improving the market infrastructure and providing connectivity and liquidity aggregation,” he added. “Exchanges connect to Quantave and settle through our post-trade platform so traders can access many venues with good operational standards from a single point of access.”
Institutional investors also have concerns about the safety of digital assets.
“Assets are safeguarded because we are not the custodian, and they are held or administered by regulated institutions,” Gordon said.
He continued that the rapid growth in trading volumes of digital assets, such as Bitcoin and Ether, is attracting the attention of institutional investors and traders who are keen to include this asset class amongst their investment strategies, but the trading infrastructure has not met their standards. Quantave said in a statement that trading volumes in digital assets now regularly peak at more than $2bn per day, compared to less than $50m four years ago.
The firm has begun testing with its initial partners ams aims to go live by the end of this year.
“We have had initial enquiries from three significant market makers and two major bitcoin exchanges,” said Gordon.
From Richard Johnson, equities and financial technology expert in the market structure & technology practice at consultancy Greenwich Associates:
— Richard Johnson (@_richjohnson) June 21, 2017
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