A New Cryptocurrency Exchange Backed by Schwab, Fidelity, and Citadel Securities Takes Off

In this article, we’ll discuss the EDX Market. This market is backed by Charles Schwab, Fidelity Investments, and Citadel Securities. The exchange has begun carrying out deals and hopes to draw brokers and investors who are interested in digital assets but are wary as a result of problems at FTX and Binance.

As a “noncustodial” exchange, EDX Markets won’t deal with its customers’ digital assets directly. Instead, it manages a market area where businesses negotiate pricing and carry out trades among themselves. Although the exchange intends to use third-party banks and a cryptocurrency custodian to retain customer assets, it still aims to introduce a clearinghouse later this year to speed up the process of settling trades.

The Role of Cryptocurrency Exchange

Individual investors won’t be directly served by EDX Markets. Instead, it anticipates that orders from investors will be sent to its marketplace by retail brokerages. This is comparable to how traditional equity markets operate, where investors place orders through brokerages like Fidelity and Schwab rather than directly accessing the New York Stock Exchange (NYSE) or Nasdaq.

Only four digital currencies—Bitcoin, Ether, Litecoin, and Bitcoin Cash—will be available for trade on the exchange. Since the SEC hasn’t classified these four cryptocurrencies as securities, doing so will help you avoid being under investigation.

Conclusion

Increased institutional participation in the crypto markets has the potential to improve liquidity and price stability. We also view the non-custodial character of the exchange as advantageous because it should improve confidence and financial security. Finally, this approach may open the door for more clarification from regulators, who are more willing to cooperate with these well-established traditional financial firms given the extensive experience Fidelity and Charles Schwab have with respect to U.S. securities legislation.