A clutch of US financial services and related companies, including Charles Schwab, Fidelity Digital Assets, Sequoia Capital, Citadel Securities, and others, have joined forces to launch a cryptocurrency exchange later this year.
It will be called EDX markets (EDXM), and Jamil Nazarali, ex-global head of business development, Citadel Securities, will be its CEO, EDX announced in a press release.
The release further said that EDXM will be a fully independent entity, and it will aim to provide a better price discovery than that offered by existing cryptocurrency exchanges.
“We will remove significant conflicts of interest that affect existing cryptocurrency exchanges, by separating responsibility for operating the exchange from the entities trading on it,” EDX said in the press release.
EDXM will use a network of select digital custodians to safeguard customers’ assets, and all trades will be netted and settled on the Blockchain. This will improve the trade settlement speed, and will also drive up efficiency at a lower cost and also completely eliminate the need for an expensive bilateral settlement system, the statement said.
Nazarali said: “We look forward to welcoming additional participants to the exchange, which will drive ongoing trading in this important asset class, while creating a virtuous cycle of continually enhanced liquidity and efficiency supported by MEMX’s cutting-edge technology.”
A company founded in 2019, called MEMX, will power this new crypto exchange. EDXM further said that their crypto exchange will serve both retail and institutional users.
EDXM’s board of directors said in the release that crypto is a $1 trillion global asset class with over 300 million participants, and millions more were interested in it.
“Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards. With MEMX-supported digital infrastructure that eliminates technological and organisational bottlenecks, EDXM will be a safe entry point to crypto and serve as the exchange of choice for trading digital assets on a platform designed for and used by leading financial institutions,” the release quoted the board of directors of EDXM as saying.
Back in April 2022, Fidelity floated an idea to launch Bitcoin (BTC) as an investment option in some of the 401(k) plans which they were administering. However, the choice to add BTC in 401(k) plans was up to the employers, and they had to do their own due diligence and obtain necessary approvals before they could offer this.
Ali Khawar, acting assistant secretary of the US Department of Labor employee benefits security administration, said in an interview with the Wall Street Journal, that they “have grave concerns with what Fidelity has done.”
“Cryptocurrencies can present serious risks to retirement savings. The US Department of Labor has serious concerns about plans and decisions to expose participants to direct investments in cryptocurrencies or related products, such as NFTs, coins, and crypto assets,” the newspaper quoted him as saying.
Incidentally, Charles Schwab’s asset management arm launched its first crypto- exchange-traded fund (ETF) in July this year.
“We know there is significant interest in this cryptocurrency space, and we will look to invest in firms and technologies working to offer access with a strong regulatory focus and in a secure environment,” Mayura Hooper, a spokesperson for Charles Schwab, said in July, reported Bitcoin.com.
