ClearToken completes PoC of its digital asset clearing house

Rick Steves

Digital assets clearing house, ClearToken, paves the way for institutional participation in the digital asset space

ClearToken, the pioneering Clearing House for digital assets, has achieved a significant milestone by successfully completing its Proof of Concept (PoC), marking a crucial advancement in the digital asset ecosystem.

Over the past six months, ClearToken has collaborated with more than 60 industry participants, spanning both traditional financial markets and emerging digital asset service providers.

The objective was to develop a PoC for the centralized clearing of digital assets, a critical missing piece in the digital asset landscape. Through a combination of in-house systems development and integrations with leading financial technology solutions providers, ClearToken has convincingly demonstrated that spot digital assets can be efficiently captured, novated, risk-managed, netted, and settled using existing market infrastructure techniques.

24/7 risk management and settlement of digital assets and derivatives

ClearToken’s partnerships encompass trading venues, market makers, prime brokers, banks, custodians, asset managers, and software vendors, establishing a robust framework for 24/7 risk management and settlement of digital assets and their associated derivatives.

Importantly, the PoC participants have provided valuable insights that will shape ClearToken’s future rulebook and operational principles. These insights are critical for extending clearing operations to enable weekend and same-day (T+0) settlement, a substantial improvement over the current T+1 and T+2 settlement timelines common in most securities markets.

Benjamin Santos-Stephens, CEO of ClearToken, expressed his gratitude to the industry professionals who contributed to the development of a viable clearing solution for digital assets. “The ClearToken team is looking forward to the next chapter, as we work towards launching the first regulated clearinghouse for digital assets.”

Adapting well-understood existing processes used in traditional market structures

ClearToken plans to release a comprehensive report detailing the lessons learned during the PoC phase, which will be presented to regulators and stakeholders as part of the authorization process.

Furthermore, the company intends to prepare its PoC technology systems for production use, laying the foundation for future user testing and certification programs.

The firm will maintain its active engagement with stakeholders, service providers, and potential clearing members as it seeks authorization as a Recognized Clearing House (RCH). ClearToken has already responded to the UK Government’s HM Treasury consultation on the proposed financial market infrastructure sandbox, known as the ‘Digital Securities Sandbox,’ for digital securities settlement. It plans to continue collaborating with industry stakeholders to advance the goals of the Clearing PoC.

Niki Beattie, Chair of ClearToken, emphasized the importance of risk management and settlement practices in digital assets, particularly in addressing the readiness gap for institutional market participation. “We know that demand is increasing, and by working together to adapt well-understood existing processes used in traditional market structures, we can create a safe and sustainable market for regulated participants and for the markets of the future.”

ClearToken’s successful PoC marks a significant step toward bridging the gap between traditional financial markets and the evolving world of digital assets, ultimately paving the way for institutional investors to confidently participate in the digital asset space.

Read this next

Institutional FX

PhillipCapital extends trade surveillance partnership with Eventus

“PhillipCapital has seen first-hand how Validus can scale to meet any capacity requirements as clients grow, as well as our team’s expertise in not only our customizable technology but the market and regulatory challenges facing the industry.”

Market News

Why Yellow Metal Prices are Plummeting

Gold prices have been steadily declining after failing to surpass the resistance zone at $1,650. The current price is at its lowest point in seven months. Strong economic data from the US has triggered a meltdown in the gold market.

Industry News

Nuvei enters China following licenses in Australia, Singapore, and Hong Kong

The expansion into China represents more than just a geographic milestone for Nuvei. It also adds an essential component to the company’s comprehensive suite of alternative payment methods (APMs), which currently counts 634 different options. These APMs play a crucial role in catering to local market preferences, thereby enhancing Nuvei’s value proposition for businesses looking to penetrate new markets within the APAC region.

Institutional FX

LiquidityBook launches LBX PMS 2.0 after acquiring Messer

With this rollout, LiquidityBook aims to meet the diverse requirements of its clientele, ranging from startup hedge funds and asset managers to broker-dealers and outsourced trading desks.

Institutional FX

Celoxica enters Australia to offer low latency market data and execution services in APAC

“There is a significant opportunity to deliver fast and efficient market access to APAC financial market participants, including trading firms, brokers, exchanges, and service providers. I am eager to extend our reach in this crucial market.”

Institutional FX

Cboe to launch four new Credit Volatility Indices (Credit VIX)

“The Credit VIX Indices are expected to provide new clear signals on bond market sentiment, and act as a new barometer of corporate credit risk in North America and Europe.”

Executive Moves

TradeZero hires Leo Ciccone as Chief Compliance Officer (CCO) for TradeZero Canada

“Leo brings to TradeZero broad and comprehensive experience coupled with deep business and regulatory relationships that will assist us in ensuring we meet and exceed industry best practices and to further our growth initiatives going forward,”

Institutional FX

Apex launches fractional fixed income trading for retail investors

“The ability for people – and not just high net-worth investors – to easily add fixed-income and diversify their portfolios is a game-changer.”

Institutional FX

MarketAxess launches Open Trading for EM local currency bonds

In an era where diversification and hedging against market risks have become imperative, this new feature could very well serve as a linchpin for international investors looking to diversify their fixed-income portfolios with EM local currency bonds.