There are already some positive signs that
cryptocurrency trading is maturing as notable players enter the market or hint
at possible plans. Last month, Canadian exchange company TMX Group, which owns
the Toronto Stock Exchange, entered the market.
TMX announced the Shorcan Digital Currency
Network (Shorcan DCN), a cryptocurrency brokerage that will provide over-the-counter
Bitcoin and Ethereum trading services
combined with consolidated market data. Its partner in the deal will be
decentralized financial services company Paycase
Financial Corp., which offers a mobile remittance platform. BMO Financial
Group, one of the “big five” Canadian banks, will provide banking services for
financial players have recently shown interest in supporting cryptocurrency
trading. In a CNBC interview on April 25, Nasdaq CEO Adena Friedman said that
the exchange would consider launching a cryptocurrency exchange in the future.
Friedman’s comments came as the company signed a deal to provide
the Winkelvoss twins’ Gemini
cryptocurrency exchange with its SMARTS Market Surveillance technology to
monitor trades and detect fraud.
Nasdaq’s positive comments on cryptocurrency
in April are not its first. Friedman has gone on the record in the past confirming
that the exchange is looking at launching cryptocurrency futures contracts,
joining existing derivatives from Cboe and CME, although she has said that the
company would take a different approach to structuring its cryptocurrency futures. Officials at the exchange have hinted
at a launch this year.
Other big players have also signaled interest. Goldman Sachs has appointed former Merrill Lynch Vice President Justin Schmidt as
head of digital asset markets, following reports that it plans to launch a
crypto trading desk.
Reflecting the positive regulatory stance on
cryptocurrency in Japan, Mitsubishi UFJ Financial Group, one of the world’s
largest banks, is also reportedly planning to launch a cryptocurrency exchange. It will
also support cryptocurrency traders with MUFJ Trust, a service that links accounts to exchanges while keeping the
traders’ money under their own control. Finally, it is planning its own cryptocurrency,
MUFG Coin, to help provide a stable transaction mechanism.
The Moscow Stock Exchange has also said that it
would like to trade cryptocurrency derivatives if regulations allowed it,
although the Central Bank of Russia is reportedly putting the brakes on cryptocurrency
Banks and exchanges are not the only
financial companies warming to cryptocurrency. Some
large investors are also preparing to get involved. The family office for billionaire investor George Soros recently gained approval to trade in cryptocurrencies, although the office hadn’t
yet executed on it as of early April.
Some respected players are busy creating the
tools for these financial companies to make ventures in this space. In January
the Intercontinental Exchange (ICE), which owns the New York Stock Exchange, launched
its Cryptocurrency Data Feed (CDF), aggregating data from 15 cryptocurrency exchanges. The
CDF, which covers seven currencies including ether, bitcoin, dash and ripple, will serve hedge funds and banks,
As momentum picks up in the traditional
finance sector, some naysayers have backtracked on previous statements about Bitcoin.
JPMorgan CEO Jamie Dimon said in January
that he regretted calling Bitcoin a fraud, although he still has little
interest in the cryptocurrency and worries about government regulation.
If large financial institutions venture into
the cryptocurrency market, it could boost trading volumes and lift prices by
creating more legitimacy in the broader