Partnership allows financial institutions to trade large volumes of digital assets at lower costs and less risk while providing exchanges new clearing and settlement options
SINGAPORE, Nov. 13, 2019 /PRNewswire/ – NextPrime, a company that brings operational and capital efficiency to institutional participants in digital asset markets, announced today a partnership with Crown Financial Services (CFS), an Asia Pacific wide financial services group providing money remittance, payment gateway, portfolio management, lending and investment services.
NextPrime and CFS’ broad partnership will provide service banking, custodianship and fast, multi-currency clearing and settlement solutions to the growing digital asset ecosystem worldwide. CFS, who is already serving a number of exchanges, will serve as a secure custody bank to NextPrime and enable financial institutions and wholesale professional traders to easily trade digital assets at lower costs and less risk.
“Trading digital assets is the future but the market structure to do that today is slow, inefficient and archaic,” says Jeff Bone, Head of Product and a Managing Partner at NextPrime. “Professional traders and institutions have huge costs, operational risk and capital inefficiencies because collateral is fragmented across many exchanges. Systematic relationships between custodians, service banking, and market participants are limited. For the market to mature this must be addressed.”
A professional trader needing $10 million in buying power on ten exchanges might be required to post up to $100 million in aggregate collateral, wait days for fiat transfers to settle and incur risk and expenses in stablecoin purchases or redemptions just to evenly rebalance buying power after a busy day of trading.
On the other hand, exchanges must manage massive customer fiat deposits and crypto collateral along with the on/off-ramp transactions for both. This raises compliance costs, limits exchanges’ banking options, substantially increases systemic risks and reduces overall liquid capital availability. Ultimately, exchanges end up spending more on compliance and regulation and less on improving their markets and innovating for their customers.
“Our partnership with CFS allows us to solve the problem of custody, which is a critical piece of the puzzle in allowing institutions and investors to securely trade digital assets and cryptocurrencies at volume as efficiently as any other asset class on the market today,” says Bone.
“This partnership is consistent with our strategy of expanding our services to industries and companies that are not adequately served by the financial markets in a fully transparent and regulated manner,” says Marvin Yee, Managing Partner at CFS. “We believe that the trading of digital assets as part of a diversified portfolio will present significant wealth opportunities to our clients throughout the region. It is our intention to be a ‘first mover’ and a foundational part of this ecosystem.”
“If crypto has any chance of becoming a serious asset class, it needs to mature in the right way in order to become a first class citizen of the financial world,” says Bone. “It’s high time that the true potential of crypto be unleashed and benefit the many and not just the few players who are profiting from a fragmented and inefficient environment that keeps crypto anemic relative to its actual capabilities. We see this partnership as a step in the right direction towards creating a profitable digital asset trading future for all.”
NextPrime’s (www.nextprime.com) mission is to mature the infrastructure of the digital asset market. Founded in 2018, the company enables financial institutions to trade digital assets with greater efficiency at lower cost and risk. NextPrime provides exchanges new clearing and settlement options with access to reputable third-party service banks and custodians internationally.
About Crown Financial Services (CFS)
Crown Financial Services (crownfinancial.co.nz) is an Asia Pacific wide financial services group headquartered in Auckland, New Zealand providing a diversified range of financial services ranging from merchant services, foreign exchange,private equity and fund management. It was established in 2004 and serves clients globally via its location hubs in Australia, New Zealand, Singapore and Malaysia. Crown Financial Services is a Limited (FSP359786) a registered provider of financial services.