Fidelity Helps Interdealer Broker Giant TP ICAP Enter BTC, ETH Trading

TP ICAP, a global banking and investment firm with headquarters in the UK, has announced that it will be entering the crypto market with the help of Fidelity Digital Assets. This is a huge sign of adoption as TP ICAP is one of the world’s largest interdealer brokers, signaling that the traditional financial sector is warming to crypto. 

TP ICAP’s Involvement in Crypto

TP ICAP will be launching their own wholesome cryptoasset platform, allowing their userbase to trade with Bitcoin and Ethereum (with the possibility of other coins and tokens in the future). One of the main features of this platform is that it will offer more security to investors, by providing segregated and interoperable means of handling trades.

TP ICAP is no stranger to the world of finance. The global firm operates throughout the world’s financial markets, with an emphasis in the energy and commodities markets. Founded in 1971, the firm is listed on the London Stock Exchange and reported a revenue of more than £1.7 billion in 2020.

Segregation reduces risk by cornering off individual trades so that they do not interfere with other trades, and interoperability is important because it provides more external options for settling trades. These are two features that are sought after by traditional investors and oftentimes taken for granted, but they are not the norm on crypto platforms.

It is important to note that TP ICAP’s platform is being built in collaboration with several other high-profile companies. Most notably, Fidelity Digital Assets, a subsidiary of Fidelity Investments, will be taking on a custodial role. This means Fidelity will be aiding in the safekeeping of cryptoassets.

However, they will be joined by Zodia Custody who will also be taking on this role. Zodia is a crypto custody specialist who was incubated by the venture capitalist arm of Standard Chartered, a British multinational financial service.

Join our Telegram group and stay connected to all things crypto, DeFi, and finance.

To help provide liquidity, TP ICAP has joined up with Flow Traders, a company specializing in exchange traded products (ETPs) on an institutional level. The main takeaway is that TP ICAP has connected with multiple well-established organizations to build and maintain this platform, showing just how seriously they are taking the crypto industry. They are not treating this as an experiment or a side-project, but rather an immensely important aspect of their growth and infrastructure. 

Simon Forster, co-head of Digital Assets at TP ICAP, commented on their position in the crypto industry, saying that:

“Client demand to trade spot cryptoassets is significant and growing, with interest coming from our traditional customer base across the different asset classes we operate in.  But to date many of our clients have been prevented from accessing cryptoasset markets due to current limitations in market infrastructure, with most execution venues requiring pre-funding and also acting as custodian. This poses challenges from a conflict of interest perspective and results in fragmented liquidity. Our partnership, and resultant new platform, is a natural evolution in market structure that will make digital assets, such as Bitcoin, more accessible for the wholesale market.”

Fidelity’s Experience with Crypto

TP ICAP’s most recognizable collaboration is no doubt Fidelity. This company has been dabbling with digital assets for some time now, although this could be their largest and most interesting venture into the market. 

Since the launch of Fidelity’s subsidiary company, Fidelity Digital Assets, they have been slowly embedding themselves into the industry. Fidelity Digital Assets launched in October 2018, when it offered custodial services as well as trading. In 2019, they further cemented their place in the industry by publishing a report detailing the main drivers of Bitcoin adoption. 

The platform focuses specifically on cryptocurrency, aimed primarily at institutional investors and more traditional traders. Like many trading platforms, it initially began by offering trading solutions for Bitcoin, but in 2020 CEO Tom Jessop discussed the company’s desire and willingness to engage with Ethereum, too. 

Fidelity’s stockbroking platform, its primary product, also gained some attention earlier in the year as many people flocked to it as an alternative to Robinhood during the start of the GME/WallStreetBets ordeal. As people left Robinhood due to its trading restrictions on select securities during the early stages of the GME battle, many dispersed to other trading platforms with greater reputations, such as Fidelity.

The company’s involvement with TP ICAP’s upcoming cryptoasset service shows that it is now taking the industry seriously and that its platform is highly refined and capable of handling the custodial needs of one of the largest brokers in the world. Of course, there are some regulatory hurdles that need to be overcome, both by TP ICAP and Zodia, but so long as approval is granted, this has the potential to shake up the industry by providing a new gateway for institutional investors. 

What impact do you think TP ICAP will have on the crypto markets? Let us know in the comments.