By MARKO VIDRIH: Former vice-president of JPMorgan and managing partner of Goldman Sachs, and now Kyber Network’s crypto project executive consultant, Hoe Lon Leng, convened industry representatives in December to discuss the future of over-the-counter trading, Bloomberg writes.
The meeting itself took place on January 20 on the Singapore resort island of Sentosa. It was attended by traders from companies such as Galaxy Digital, Circle, Binance and Coinbase. Together they organized the first Asian round table on over-the-counter cryptocurrency trading.
The main topic of discussion was over-the-counter contracts, representing non-standardized bilateral derivatives, exposing the participating traders to significant counterparty risks.
The Singapore meeting generated the first ever clearinghouse for cryptocurrency derivatives, the purpose of which is to increase trading volume and significantly reduce transaction costs. Liquidity Offset Network will begin operations in July and will be regulated by the Monetary Authority of Singapore. It will become the central counterparty in the transactions and will offer such services as margin calculations and confirmations.
It is expected that Liquidity Offset Network will save traders from having to make collateral to work with each of the counterparties – at present this is a serious limitation for small funds. If their transactions go through a single centralized counterparty, the requirement for collateral will be reduced.
The next round table will be held in Chicago in May and will attract more US traders to the initiative, who account for a significant share of influence in this market.
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