According to two sources familiar with the plan, London's Standard Chartered Bank has gathered a number of crypto exchanges to create a new digital asset trading platform tailored for the institutional market.
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A person familiar with the matter told CoinDesk that Standard Chartered’s crypto trading group consists of the 5 largest over-the-counter (OTC) traders and 4 exchanges, and will include an Ethereum-based settlement token.
According to the source, companies involved in the custody and transaction projects include LMAX and ErisX. In addition, supporting the project are Switzerland-based hosting provider METACO, which Standard Chartered Bank has invested in; and the UK-based trading technology provider Cobalt (Standard Chartered Bank is also an investor in the company).
Standard Chartered Bank and other companies named declined to comment.
"Standard Chartered plus 5 largest digital asset dealers and 4 exchanges are about to start this new model," the person said. "I think the first test transaction will take place next month. I want to say that it will eventually involve the top 10 exchanges in the digital field."
Similar to Tether, but for banks?
The source added that the settlement tokens used by Standard Chartered's encrypted trading platform will be based on Ethereum's ERC-20 standard.
"A lot of people are admiring the use of Hyperledger and Corda, but we specifically chose something that the native encryption community can accept," the source said.
The system will create an institution-centric equivalent of Silvergate Bank's Exchange Network (SEN), the source added.
"We are building our own fiat collateral tokens, and hope that this is a product similar to Tether, except that the tokenized collateral or funds will be deposited in the transaction bank account of a formal bank, such as Standard Chartered Bank. , JPMorgan Chase, Deutsche Bank," the source said.
(This token sounds a bit similar to the digital asset Avit issued by the bank of Caitlin Long's Avanti Finance Company).
According to reports, SC Ventures, the innovation arm of Standard Chartered Bank, was working on an institutional crypto custody project as early as the summer. The bank has participated in a number of projects involving encryption technology, including anti-money laundering (AML) solutions. At a virtual event on Monday, Bill Winters, CEO of Standard Chartered Bank, joked that he was preparing to announce a news.
"Standard Chartered Bank has been working on this for a long time and is working in conjunction with other giants in the crypto field," the second source involved in the construction told CoinDesk. "This is extremely serious, not a proof of concept. They have passed all inspections and compliance, and are introducing some exciting names."
Big banks that have avoided encryption technology are quickly enthusiastic about this idea. It is said that BBVA, Spain's second largest lender, will launch digital asset custody and trading products from Switzerland early next year.