One of the major factors believed to be vital to the growth and sustainability of the digital assets industry is institutional adoption. This is what EDX Markets represents. EDX Markets is a first-of-its-kind crypto exchange launched in June 2023. The new digital assets trading platform seeks to primarily expand the adoption of cryptocurrency among financial institutions. It leverages best practices from traditional finance to enable institutions to trade selected cryptoassets.
In particular, the new crypto marketplace is building a legacy for itself as one of the most trusted crypto trading protocols with numerous benefits to its members. Its advanced industry-leading technology makes it an ideal option for institutional investors looking for a secure, regulated, sustainable, and efficient cryptocurrency exchange platform.
EDX Markets made waves in the media in June 2023 when Bitcoin Cash (BCH) experienced an extraordinary surge, catapulting its value by a staggering 107.22% within seven days of being listed on the newly launched trading platform.
Understanding EDX Markets
EDX Markets is an emerging crypto trading platform designed to cater for the needs of large financial institutions as well as crypto-native firms. It is backed by Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital, and Virtu Financials. Touted as the crypto exchange for institutions, EDX Markets has also received support from several Wall Street giants, including Miami International Holdings, along with affiliates of proprietary trading firms DV Trading, GTS, GSR, and Hudson River Trading.
Launched on 20 June 2023, EDX Markets is designed to enable safer and faster cryptoassets trading for U.S.-based institutions. Customer security and regulatory compliance are the core foundational principles for EDX Markets. MEMX, an innovative, customer-centred market operator founded in 2019, is responsible for providing the technological infrastructure for EDX Markets.
Using the proven technologies provided by MEMX, EDX Markets delivers a well-tested and reliable platform. The exchange prides itself as offering its members a competitive, transparent, and liquid market with best-in-class risk management. It also offers several innovative market features such as EDX Clearing and provides robust market surveillance and supervision.
Speaking on the launch of the platform, the CEO of EDX Markets Jamil Nazarali emphasized the organization’s commitment to bringing the best of traditional finance to the crypto markets, with an infrastructure built by experts for institutions. In his statement, he said:
“EDX’s ability to attract new investors and partners in the face of industry headwinds demonstrates the strength of our platform and the demand for a secure and compliant cryptocurrency market. With the approval of our new and growing roster of investors and clients, we are proud to launch trading and look forward to further improvements to our offering. Looking forward, EDX Clearing will be a major differentiator for EDX and will address an unmet market need, strengthen competition and create unmatched operational efficiencies through a single clearing process.”
How does EDX Markets work?
The operation of EDX Markets is based on a set of clear and well-defined rules that ensure all-around efficiency and transparency. To ensure operational efficiency, the Charles Schwab-backed exchange adopts a single marketplace and integrated settlement process. EDXM’s net settlement approach further enables it to achieve capital efficiency.
It bears mentioning that EDX markets have taken an opposite approach to conventional centralized crypto exchanges such as Binance and Coinbase by defusing retail investors and avoiding asset custody. Said differently, EDX Markets does not offer custodial services. Rather, it acts as a marketplace where institutional investors can set their rates and execute trades.
At the time of writing, EDX Markets only supports four top cryptocurrencies, including bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). It offers spot trading access for these assets via API. Notably, EDX does not offer a front-end or trading graphical user interface (GUI).
When launched, the so-called EDX Clearing feature would aid in facilitating trades for members on the platform by acting as a central counterparty. Above all, the clearing house allows members to benefit from enhanced price competition and reduced settlement risks, while increasing operational efficiencies.
While it allows 24/7 trading, EDX Markets reserves the right to suspend trading for maintenance or system upgrades. It allows transactions to be processed through a central counterparty, offering participants greater benefits in terms of price competitiveness and reduced settlement risks thereby improving and increasing operational efficiency.
The launch of EDX Markets comes at a time when the U.S. Securities and Exchange Commission (U.S SEC) is intensifying its crackdown on centralized exchanges. Recall that the Gary Gensler-led regulatory agency recently filed a lawsuit against Binance and Coinbase, claiming that they are unregulated. Before now, the Securities Commission attacked Bittrex and Kraken, causing Bittrex Exchange to cease operations.
These issues somewhat hindered institutions from entering the crypto market. EDX Markets, therefore, provides an avenue for leading names in finance, including retail brokers, global market makers, and venture capital firms to engage in crypto trading.
As mentioned, EDX Markets is designed for institutional investors alone. Individuals cannot join EDX as the platform does not offer direct retail accounts. To join EDX, institutions and organizations with the required registration and licenses can apply for EDX membership. The digital assets industry can certainly do with more institutional adoption. In an industry that has suffered distrust particularly after the FTX implosion, institutional adoption is expected to generally enhance trust and improve confidence in the emerging digital assets industry.
Credit: Ndianabasi Tom
A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).