Talos Launches FX, Crypto, Synthetic Crosses
Posted by Colin Lambert. Last updated: August 5, 2021
Digital assets trading technology provider Talos, has added a new feature to its platform to allow users to define and trade synthetic pairs that include FX and crypto legs.
As a result, Talos’s clients can now trade or provide prices in pairs like BTC-EUR by automatically combining the FX (EUR-USD) and the digital asset (BTC-USD) legs to derive a cross rate with what the firm says will be a tighter spread. Investors will also have direct access to a pool of both FX and crypto liquidity, as well as the ability to move efficiently from asset to asset.
Talos says that non-US clients looking to trade between their home currency and crypto will typically encounter wider spreads, which forces them to trade via more liquid pairs like BTC-USD. The new functionality, it adds, significantly streamlines the FX leg, reducing the operational burden and the associated market risk for such scenarios and improving execution costs considerably.
“Digital assets are traded worldwide by the retail sector and institutions alike, but the majority of the liquidity remains in USD-denominated pairs,” says Anton Katz, co-founder and CEO of Talos. “Given the rapidly increasing number of non-US institutional clients we’re now seeing, the ability to trade seamlessly from any fiat currency to any cryptocurrency should significantly reduce trading costs and bring further international players to our platform.”
On the firm’s trading platform, investors can see all active trading counterparties along with available quantities across all supported FX and synthetic markets. Using the FX capabilities, the system will arrive at a single cross-rate price based on the quantity required and will then concurrently execute both the FX and crypto components of the transaction.
“We believe that the rise of initiatives like DeFi, Central Bank Digital Currencies, and the tokenisation of traditional asset classes will benefit from a unified technology supporting all of them,” says Katz. “The addition of the synthetic crossing functionality is yet another example of our commitment to help institutions interact with this new world through a familiar lens.”