A group of former executives from Cantor Fitzgerald launched a cryptocurrency loan platform, hoping that once they receive regulatory approval in the US, it will assist operators of spot Bitcoin exchange-traded funds. The Jersey City, New Jersey-based business Digital Prime Technologies stated on Tuesday that its Tokenet already enables customers, like as Xapo Bank, to …
A group of former executives from Cantor Fitzgerald launched a cryptocurrency loan platform, hoping that once they receive regulatory approval in the US, it will assist operators of spot Bitcoin exchange-traded funds. The Jersey City, New Jersey-based business Digital Prime Technologies stated on Tuesday that its Tokenet already enables customers, like as Xapo Bank, to lend out digital assets to third parties, like EDX Clearing and the worldwide institutional credit network Hidden Road Partners. Users can handle loans with the setup’s chat feature and risk-management features. The company’s launch of products to cover the hole left by the failure of cryptocurrency lenders Genesis, Celsius, BlockFi, and others brings it up to date with a plethora of exchanges and other businesses, such Swan Bitcoin.
Due to a lack of options following the collapse of the crypto loan business last year, trade volumes were suppressed into 2023. The launch also comes at a time when there is growing hope that a Bitcoin-specific ETF will be approved in the US in the coming months. In that case, Digital Prime anticipates that ETF issuers will be extremely eager to borrow Bitcoin, which will help to propel the nascent crypto-lending market. For instance, authorised participants may decide to borrow Bitcoin instead of buying it at a later time if they need to add additional inventory to the ETF but the price of the cryptocurrency spikes unexpectedly, according to Runnels. When demand for an ETF increases, specialised traders known as authorised participants can collaborate with the issuer to produce new shares. Participants redeem those shares with the fund sponsor when buyer appetite wanes, so reducing the supply and maintaining the ETF’s price relative to its net asset value.
After being granted membership in the Financial Industry Regulatory Authority last year, Digital Prime’s DLCC Prime subsidiary is now able to conduct business as a broker-dealer that is registered with the Securities and Exchange Commission. Seed money for Digital Prime came from investors such as TD Cowen Inc.
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