Big Wall Street Firms to launch crypto exchange EDX Markets next year

A group of large investment firms—Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial—have announced plans to launch a cryptocurrency exchange named EDX Markets. The crypto exchange is expected to go live in January next year.

In a press release, EDX Markets is described as a “first-of-its-kind exchange.” The firms promised that the new exchange would deliver a crypto trading experience that is “safer, faster and more efficient.”

“The intention of the industry consortium is to build market infrastructure that contributes to increased optionality for liquidity to facilitate a more efficient, secure and cost-effective process for trading digital assets,” Fidelity said.

EDX Markets will cater to retail and institutional investors. The developers said the platform would provide an “entry point” for people to get their hands on digital investments. They said the growing crypto market was the reason behind the project.

“Crypto is a $1 trillion global asset class with over 300 million participants and pent-up demand from millions more,” the project’s press release said.

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“Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.”

Citadel’s former global head of business development Jamil Nazarali has been appointed EDX Markets chief executive officer. To operate the crypto exchange, the firms work with The Member Exchange (MEMX), a well-known equity exchange. They also plan to expand the venture by inviting more participants.

“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,” Nazarali said.

Nazarali explained that the exchange would operate in a similar manner to traditional futures and options trading. EDX Markets will enable investors to purchase and sell digital assets through a broker-dealer. Users do not need to head to the native token’s exchange to conduct the transactions.

MEMX chief executive officer Jonathan Kellner explained that his company had modified its infrastructure to accommodate digital asset trading done by the EDX Markets. This project is MEMX’s entry into the digital trading industry. The company plans to use a data center located in New Jersey as a home base for the crypto exchange’s system.

Traditional finance’ view on digital currencies

There are varied views on digital currencies from actors in traditional finance. Citadel founder Ken Griffin made several anti-crypto remarks in the past, comparing digital assets to abstract arts. However, he reportedly had softened his stance as the crypto market soared and said Citadel might dip into the industry.

Some Wall Street financial advisors have decided not to fully embrace digital assets. They advise their clients only to invest a small percentage of their funds. These advisors also do not provide direct guidance for their clients to obtain cryptocurrencies.

Nonetheless, there are other finance companies offering crypto services. Fidelity was reportedly evaluating Bitcoin offerings to its retail investors. Charles Schwab’s branch, Schwab Asset Management, also recently introduced an exchange-traded fund (ETF). The ETF allows Schwab’s clients to invest indirectly in various cryptocurrencies.

The attitude shift towards crypto among actors in traditional finance occurs despite the current instability in the crypto market. Bitcoin and Ether, the two largest crypto coins in the world, suffered significant value losses in recent months.