Digital Asset Economy Fuels Instant Settlements Innovation
Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction. Innovations such as shared ledger transactions for institutional investors and traders are enabling transfers to be made of any amount and at no cost which is essential in a fast moving crypto market.
The digital asset economy has been a catalyst for payments and treasury innovations that have helped increase market liquidity with institutional investment leveraging new products and services. Funding trades on legacy networks that close outside of business hours can take days to send money. Price swings during the time it takes for settlement impacts margins and in some cases the ability to make a trade. Digital assets have fuelled the demand for business accounts that provide regulated access to the crypto market with USD as well as non-USD currencies with BCB Group customers able to transfer their funds with no limits and instantly between account holders.
The products and services featuring BCB Group’s instant settlements are being adopted by institutional players and are proving invaluable for large firms hoping to expand their interests into Europe. Reliable cross-border payments reduces the friction for international trading at a time when costs and efficiency are paramount with instant transfers made possible by sharing networks that have a common ledger with direct connectivity and no intermediaries to charge fees or slow down the process. This has improved settlements on all fronts – speed, cost, reach and transferable amounts.
A shared ledger means that everyone using the network can go through compliant onboarding such as KYC and PEP sanctions checks with money never having to move across accounts. The ledger calculates all transactions at run time, settles the balances, and reconciles to make sure the balances are in sync with physical bank accounts. This is especially useful for cryptocurrency services such as exchanges, liquidity providers, market makers, OTC brokers, funds and prime brokers. Traditional banks offering instant settlements on high-value, wholesale payments are often restricted to limited currencies and geographies whereas BCB Group has levelled the playing field offering accounts with integrated payment networks.
Internal omnibus accounts that can share a ledger with other users streamline the settlement process in ways that can accommodate non-USD currencies with efficiency and flexibility that separates what has previously been on offer in Europe from traditional banking. The unnecessary costs of instant settlements are being consigned into the history books of traditional finance with a new infrastructure layer taking its place built to solve the limitations of legacy banking and payment rails. This has increased institutional access to Europe for trading and investing in real time across borders during an exciting new era that has consolidated industry standards and best practices for fiat and crypto markets.
Written by Ankur Sharma, Product Manager – Payments and Banking. Ankur has over 10 years experience in the payments sector and has worked with a variety of banks including NatWest, Lloyds, Metro Bank, and HSBC.
BCB Group comprises BCB Prime Services Ltd (UK), BCB Payments Ltd (UK), BCB Digital Ltd (UK) and BCB Prime Services (Switzerland) LLC. BCB Payments Ltd is regulated by the Financial Conduct Authority, no. 807377, under the Payment Services Regulations 2017 as an Authorised Payment Institution. BCB Prime Services (Switzerland) LLC, a company incorporated under the laws of the Swiss Confederation in the canton of Neuchâtel with business identification number CHE-415.135.958, is an SRO member of VQF, an officially recognized self-regulatory organization (SRO) according to the Swiss Anti-Money Laundering Act. This update: 14 Oct 2020.
The information contained in this document should not be relied upon by investors or any other persons to make financial decisions. It is gathered from various sources and should not be construed as guidance. The information contained herein is for informational purposes only and should not be construed as an offer, solicitation of an offer, or an inducement to buy or sell digital assets or any equivalents or any security or investment product of any kind either generally or in any jurisdiction where the offer or sale is not permitted. The views expressed in this document about the markets, market participants and/or digital assets accurately reflect the views of BCB Group. While opinions stated are honestly held, they are not guarantees, should not be relied on and are subject to change. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This document may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Past performance of the digital asset markets or markets in their derivative instruments is not a viable indication of future performance with actual results possibly differing materially from those stated herein. We will not be responsible for any losses incurred by a client as a result of decisions made based on any information provided.