StoneX Digital was launched in 2022 to provide institutions with access to digital assets and four years later, the division of financial services group StoneX, has been licensed to expand in the European Union.

Brian Mulcahy, chief executive of StoneX Digital, described StoneX as one of the largest non-bank financial services firms.

Mulcahy told Markets Markets that in traditional finance StoneX provides information, access to liquidity, the ability to execute a strategy as efficiently as possible and custody, so it was a natural evolution to do the same in digital assets. StoneX’s chief executive, Philip Smith, wanted to build a digital asset business in a primary jurisdiction with strong regulations.

“When we launched that meant the EU,” said Mulcahy. “Our virtual asset service provider (VASP) license was approved in 2024 while we worked on the MiCA approval, so it has been a long journey.”

In January this year, StoneX Digital said in a statement that it had secured its crypto-asset service provider licence under the European Union’s Markets in Crypto-Assets (MiCA) Regulation from the Central Bank of Ireland. The licence allows StoneX Digital to expand its services across the EU by offering digital asset execution and custody.

“We are in a really interesting position because we started early and have global reach,” Mulcahy added. “Other firms are registering in the E.U., and many are waiting for U.S. regulations to take shape, while we were able to navigate that environment.”

The business has spent three years building infrastructure and Mulcahy said clients are attracted by StoneX Digital’s ability to bridge traditional and digital assets.

“There aren’t that many large, well-capitalized, highly regulated firms that have made it as far as we have in spot trading,” he added.

For example, clients may want to sell treasuries and buy bitcoin and Mulcahy said StoneX Digital is one of the few “shops” that can currently get it done on the same day.

Another advantage, according to Mulcahy, is that StoneX Digital has built a separate platform for digital assets, but has focused on providing the same look and feel that institutions use in traditional finance. For example, the group has been upgrading its client portals so customers can see an aggregated view of their portfolio, and digital assets will soon be included.

Prime brokerage

Mulcahy described StoneX Digital as essentially a digital asset prime brokerage in terms of execution and custody.

“We are now multi-asset and the financing business is expected to launch in the spring,” he added.

StoneX Digital is also building the ability to margin across products, so a client trading crypto, ETFs or futures receives a single margin statement. Although StoneX Digital is not licensed for traditional products, the traditional firm is regulated by the UK’s Financial Conduct Authority and compliant with MiFiID, the European Union’s regulatory framework.

In January this year StoneX Digital said in a statement that it had partnered with Enhanced Digital Group, which provides bespoke over-the-counter derivatives treasury solutions and structured products for digital assets. StoneX has participated in and led EDG’s Series A funding round and acquired a minority stake in the company.

Competition

Large traditional banks are entering the digital asset space and are likely to eventually extend their prime brokerage activities into digital assets, while crypto native firms are launching onchain prime brokerage.

For example Ondo, which aims to bring financial markets onchain, launched Ondo Perps in February this year to allow non-US users to trade perpetual futures 24/7 on leading U.S. stocks and ETFs with leverage. Ondo has also launched tokenized versions of hundreds of U.S. stocks and ETFs and said that as a result, Ondo Perps transforms tokenized securities from static holdings into productive capital.

Ondo said in a statement: “The ecosystem has been designed to be modular, with each platform reinforcing the next. With perpetuals and spot markets, Ondo Perps and Ondo Global Markets is a clear example of this architecture in action, and represents the early stages of onchain prime brokerage.”

Mulcahy argued that StoneX Digital will always have a different focus from banks as it provides brokerage services.

“Our focus is on active trading clients looking for a multi-asset approach and we can react more quickly than larger firms,” he added.

He expects StoneX’s role as a broker to continue to expand as the firm has a substantially more robust balance sheet than 15 years ago,

“We are closely watching the tokenization space, especially for assets such as commodities that are challenging to trade and fund,” he added. “If settlement is quicker and less collateral is tied up, that is very helpful for the market.”