Summary of Article
- Nickel Digital is advocating for increased integration of off-exchange settlements in crypto, noting that OES solutions can dramatically reduce fraud and bankruptcy risks.
- Analysis shows 63% of crypto daily trading volume is currently on 7 of the largest crypto exchanges that integrate OES solutions.
- 11% of daily trading volume is on a few well-established platforms, including Coinbase, Kraken and Bits.
Nickel Digital Asset Management, a London-based investment manager authorised by the Financial Conduct Authority (FCA) and registered with US Commodity Futures Trading Commission (CFTC), is advocating for increased integration of off-exchange settlements in cryptocurrency. This solution has been shown to dramatically reduce fraud and bankruptcy risks while providing greater protection to investors from events such as the shocking collapse of crypto exchange FTX. Analysis shows that 63% of cryptocurrency’s daily trading volume is currently on 7 top exchanges integrating OES solutions, with 11% more being processed on a few well-established platforms such as Coinbase, Kraken and Bits.
Increased Use Of Off Exchange Settlements In Crypto
Off Exchange Settlement (OES) solutions enable off-exchange settlements that take advantage of the benefits provided by blockchain technology such as enhanced visibility into transactions. According to Nickel Digital Asset Management CEO Anatoly Crachilov: „We believe OES is the best path forward to mitigate counterparty risks in the crypto ecosystem, eliminating the need for investors to keep their capital at trading venues.“ The UK based hedge fund manager also noted that if more crypto exchanges joined a core group already integrated with this solution it could significantly reduce counterparty risk and help protect investors even further.
63% Daily Trading Volume On 7 Top Exchanges Using OES
As of 15 March 2023 seven out of twenty largest cryptocurrency exchanges had already integrated with OES technology which accounts for 63% daily trading volume. Moreover, one more platform is in the process of integrating this solution pushing total daily traded amount up to nearly 70%. Those 11 percent are represented by well established names like Coinbase, Kraken or Bits.