Prime brokerage services for cryptocurrencies are relatively almost new. Preferred brokerage firms have been around in traditional finance for decades.
Within the Bloomberg Crypto Summit event framework, there was addressing this Thursday, February 25, the so-called prime brokerage in the area of bitcoin and cryptocurrencies. Mike Belshe, co-founder and CEO of BitGo, and Genesis CEO Michael Moro participated.
The preferred brokerage groups a set of services that investment banks and other financial institutions have been offering to hedge funds and clients. These services add custody, loan and securities reconciliation, settlement, and consulting, as well as risk analysis and management.
The main goal of the forum on preferential brokerage at the Blomberg event was to elevate the opportunities it presents in investing in cryptocurrencies.
Michael Moro starts talking about the differences between preferred brokerage services in traditional finance and their offering in the cryptocurrency scenario.
What BitGo and Genesis are doing with this set of services for the world of cryptocurrencies is a product that should stem from decades of similar work in traditional finance brokerage. The purpose is mainly to meet the requirements of hedge funds.
Michael Moro, CEO of Genesis
The executive says that the intention is to create a comprehensive solution, which groups together a set of diverse services so that hedge funds can use the platforms of preferred brokers to consolidate their transactions, loan and custody requirements, and the administration of funds.
The idea is to generate a better user experience when working with cryptocurrencies, very similar to what users might expect from the traditional preferred brokerage environment.
“The differences do not come only from the type of product, but from the regulatory perspective. They took it into account to build that bridge that we mentioned, which joins the two worlds,” said Moro.
For Mike Belshe, clients already have expectations about preferred brokers, and it is a must for them to meet those expectations. The tasks that ensure compliance with existing legislation in the face of regulators are the most demanding for companies that provide brokerage services.
Belshe Also Points Out:
“And then, what we want is to take advantage of the advantages of cryptocurrencies, which bases on transparency and openness, and make sure that these projections come to happen in the financial system of the future.”
In some cases, Belshe says, it is necessary to work with clients from scratch because working with cryptocurrencies is different. Working with cryptocurrencies requires expertise in the technology area.
Besides, Michael Moro says that when users think of stocks, they associate those stocks with traditional deals like the New York Stock Exchange or Nasdaq. In contrast, in the world of cryptocurrencies, bitcoin, and ether, dozens of deals worldwide are trading.
By: Jenson Nuñez