Subsidiary of Deutsche Boerse Provides Cryptocurrency as Off-Market Collateral for Securities
In the rapidly evolving world of digital assets, two innovative solutions are making waves: BridgePort and AnchorNote. BridgePort, a middleware company, is connecting reputable custodians and execution venues, allowing trading firms to choose any custodian and any venue without constraints. This agnostic approach is a game-changer, as BridgePort is indifferent to the underlying collateral as long as it is accepted by the trading venue and custodian. Philipp Dettwiler, head of custody and settlement at Crypto Finance, the company behind AnchorNote, notes that this service bridges a critical gap between custody and capital efficiency. AnchorNote enables institutional clients to trade digital assets across multiple venues without moving assets out of custody, a feature that could significantly boost confidence in the digital asset market. AnchorNote's initial rollout focuses on Switzerland, with plans to expand into Europe. It aligns with established models in traditional finance, providing custody safeguards required for institutions to trade with confidence in digital assets. By removing trading platform risks and making collateral productive, AnchorNote bridges the trust gap, allowing institutions to approach crypto with the same confidence they have in equities, fixed income, or FX markets. BridgePort's functions extend beyond pre-order credit allocation and improving settlement economics. It aims to add functions such as dynamic credit rebalancing, allowing the redistribution of allocations between exchanges at the request of a trading firm. Post-trade settlement is also facilitated, netting trades and sending settlement instructions so assets can be transferred onchain. Nirup Ramalingam, CEO of BridgePort, is at the helm of this institutional revolution. With nearly 15 years of experience in FX and fixed income derivatives trading systems, Ramalingam launched BridgePort to address the pain point of connecting an exchange to a custodian. Ramalingam leads efforts to add key functions such as dynamic credit rebalancing, post-trade settlement facilitation including onchain asset transfer, and the use of AI to detect trade breaks, aiming to optimize trading economics and reduce settlement risk for institutional clients. Meanwhile, OpenEden's off-exchange collateral (OEC) model, which keeps assets with regulated custodians rather than the trading platform itself, is another step towards enhancing trust in digital assets. According to Jeremy Ng, CEO of OpenEden, OEC removes risks of security vulnerabilities, insolvency, or fraud. Interestingly, nearly one third of the surveyed market participants also expect custodians to be the network providers to these digital markets. This trend is supported by the findings in Citi's latest Securities Services Evolution whitepaper, which states that half of its survey respondents expect financial market infrastructures (FMIs) to be the core enablers of digital markets for equities and fixed income. As these innovative solutions continue to develop and gain traction, the future of institutional crypto trading looks brighter than ever.
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