LMAX Exchange announced it has unveiled a physical digital currency exchange which will serve institutional clients only. According to LMAX Exchange’s CEO, David Mercer, the move will further legitimize the digital currency market by providing institutional clients with a platform through which they can securely purchase, hold as well as trade virtual currencies while enjoying deep liquidity.
LMAX Digital will be the name of the crypto exchange. It was developed following requests from current institutional clients interested in a platform for trading digital assets with other institutions. The clients also desired an efficient platform which they could trust and one that is credible. Only the most established and liquid virtual currencies will be available on the platform. These will be Bitcoin Cash (BCH), Ripple (XRP), Litecoin (LTC), Ethereum (ETH) and Bitcoin (BTC).
“The rise of institutional trading of crypto currencies will be a game-changer for the industry. We believe our new exchange will support the transformation of the crypto market from the fringes to the mainstream,” said Mercer.
According to the CEO, the LMAX Exchange has traded fiat currencies worth more than $10 trillion since its creation. Currently, the exchange has institutional clients who hail from more than 100 countries. Besides London, where the infrastructure of LMAX Digital will initially be located, the exchange will eventually set up facilities in Tokyo and New York in order to meet the needs of clients worldwide.
Central order book
LMAX will use a transparent, central order book to trade virtual currencies. Additionally, LMAX will provide options for storing the digital assets to provide security against cybercrime. Many other crypto exchanges have taken extensive measures to curb these cyber-heists. Gemini Exchange has hired Nasdaq to perform monitoring services at its virtual currency trading venue.
According to capital markets consultancy Tabb Group, institutional investors have been prevented from trading digital currencies because of inadequate infrastructure, poor quality of data and little or no regulatory clarity. With the right conditions, institutional clients could enter the market. The digital currency exchange business is lucrative and the Tabb Group estimates the amount of trading fee revenues generated daily could reach up to $3 billion. However, institutional investors could trade double that amount in digital currencies on the OTC market.