Leading over-the-counter cryptocurrency liquidity provider, B2C2, has recently announced that its U.K. subsidiary has attained the approval from Great Britain’s Financial Conduct Authority (FCA) to issue crypto-based contracts for difference (CFDs).
What’s A CFD? And How Does It Apply To Crypto?
A Contract For Difference is a type of financial instrument that allows investors to bet on movements within specific markets, even without owning the underlying asset/commodity.
Once launched, the newly-regulated CFDs will be made available to B2C2’s professional clientele, suggesting the firm does not currently hold plans to offer the crypto-related products to retail investors.
Founder and chief executive of B2C2, Max Boonen, recently stated that the CFDs will allow the firm’s professional customers and other eligible investors to gain exposure to the cryptocurrency markets, enabling them to benefit from competitive pricing, whilst avoiding risks associated with custody of digital assets.
The FCA’s approval of the crypto-based product is a first of its kind in the U.K., although some brokerage firms already offer similar financial vehicles.
Relaxing Their Views?
The move by the Financial Conduct Authority suggests that the agency is becoming more accustomed to the digital currency sector. In November 2018, it was reported that the FCA had doubled the number of crypto-related firms that it was investigating, specifically firms they expect of acting without proper permissions.
The FCA’s Christopher Wollard was quoting expressing his concern with regards to crypto-backed investment products aimed at retail investors:
“We’re concerned that retail consumers are being sold complex, volatile and often leveraged derivatives products based on exchange tokens with underlying market integrity issues.”
The recently-reported approval could be seen as momentously positive for crypto firms operating within the U.K., along with the burgeoning digital asset sector as a whole.
Many investment firms could potentially flock to take advantage of the CFDs made available by B2C2, boosting overall market liquidity — something the crypto markets have been stupendously lacking for a while.
B2C2: From Strength To Strength
The London-based cryptocurrency liquidity provider, which was founded in 2015, was fast to establish itself as a prominent figure in the electronic over-the-counter (OTC) digital currency trading space.
Towards the end of 2018, the firm announced that it had partnered with Caspian, a crypto-trading and risk management firm. The collaboration was cited to allow B2C2’s client base to acquire greater exposure to multiple digital currencies.
Speaking on the recent partnership, B2C2’s CEO said:
“We’re delighted to be joining Caspian as they seek to increase institutional involvement in crypto trading. Many retail brokerage firms already trust us to provide liquidity for their crypto trades and we believe the multi-functional Caspian platform will appeal to these clients too.”
Drawing Institutional Investment
B2C2’s crypto-backed CFDs will be targetted at large institutional investors, which could act as another significant catalyst, potentially providing the digital currency markets with a well-needed boost.
As recently reported by Live Coin Watch, investment giant, Fidelity, could also be attracting the attention of institutional investment firms. The U.S.-based financial firm announced that it would be launching its Bitcoin (BTC) custody service in March of this year.