StoneX Executes First Bitcoin Cash-Settled Swap to Boost Crypto Growth

​Fazzaco learned that StoneX Group Inc. (NASDAQ: SNEX), a diversified global brokerage and financial services firm providing execution, risk management and advisory services, market intelligence and clearing services across multiple asset classes and markets around the world, announced on Tuesday that it successfully executed and settled its first cash-settled BTC/USD swap. 

According to StoneX, the new offering, provided to the firm's institutional FX clients since earlier this year, has complemented the company's traditional institutional FX products, including more than 40 currency trading pairs spanning major and emerging market currencies, forwards, non-deliverable forwards and options.

In addition, the company noted that the counterparty to the trade was one of StoneX's institutional FX clients, Liquidity Solutions Global, the London-based subsidiary of DriveWealth Holdings and a liquidity provider to multiple cryptocurrency venues.

As StoneX has been exploring the digital assets space for years, the move is the first step in building out an institutional-grade crypto book, according to Eric Donovan, its global head of institutional foreign exchange trading.

"As with any other asset class, investors need to connect to digital assets markets through a trusted partner who can secure best execution and meet their compliance and custody needs. Cash-settled swaps allow our clients to access the market movement of underlying digital assets without taking physical custody. As a result, many regulated institutions are looking to the swaps market as a cost-effective way to gain access to crypto price exposure without the regulatory burden, cost, and additional risks traditionally associated with spot crypto ownership," added Eric.

With this new offering, the company, together with other Wall Street players, including Goldman Sachs, has set up in-house crypto trading operations. Goldman has reportedly both originated a bitcoin-backed loan and traded non-deliverable bitcoin options. 

To maintain the recently reported strong performance in Q2 FY22 total revenue, StoneX plans to expand its crypto business by rollouting additional crypto products and services to both institutional and retail clients over the next year.