Fidelity Digital Assets Onboards First Crypto Exchange, ErisX to Increase Trading Liquidity
ErisX clearinghouse now has a new member, Fidelity Digital Asset, (FDA) has joined ExisX in order to offer better buy and sell liquidity by taking advantage of its own central limit order book.
The announcement of Fidelity's new venture was made on Thursday, and stated that the ErisX spot market will be available for all FDA customers. ErisX is the first crypto exchange to be onboarded by FDA. Terrence Dempsey, head of product at FDA believes, that ErisX was so attractive to his company because they are regulatory compliant and have the right counterparty risk analysis tools. He said,
“We have an execution platform that is connected to our custody offering that offers two things,” he said. “One [is] a matching engine, so we'll look to cross client trades and if we can't … we go out to a network of venues, or liquidity providers as we call them, that we can actually go and execute with.”
ErisX Validates FDA’s Work
The CEO of ErisX, Thomas Chippas, said of the new partnership:
“[…] a great validation of what we’ve been working on for so long, which is to get these sorts of household institutional intermediary names into our market.”
Crypto enthusiasts already know that one of ErisX’s goals is to make more traditional intermediaries come into the crypto world, and FDA has invested efforts in doing all this by offering execution and custody services for quite a while now. Thursday's announcement indicates the already long lasting relationship between the 2 companies will further be solidified. Fidelity Digital Asset was one of the initial investors in ErisX back in 2018.
What Benefits Will the Deal Bring?
The central limit order book is a great benefit as it's made available to all clearinghouse participants so they can access the same pool of liquidity. While OTC desks are tapping a price when having to connect buyers and sellers in order to increase their own profits, the ErisX system doesn’t do this. Dempsey said FDA worked in the past with OTC desks, but decided that identifying the liquidity pool to which the crypto custodian of the asset manager has access is what’s truly helpful. In other words, ErisX provides access to its spot exchange and order book, with the user experience and interface are being handled by FDA.
ErisX to Continue Adding Clearinghouse Members
As Chippas said, ErisX is planning to add more clearinghouse members. He didn’t specify how many members there are at the moment but mentioned they’re both institutional and retail clients. Names like TradeStation and TD Ameritrade were noted. He added that the new partnership with the FDA won’t raise any concerns for the long-term relationship ErisX has with TD Ameritrade. He added,
“The fact that Fidelity’s customer trades will now occur on a regulated and surveilled order book should build confidence for other entities.”