Hyphe secures BaFin license to serve retail brokers, asset managers, ETPs

Rick Steves

“Whether it’s straightforward retail brokerage, automated execution for asset managers, or servicing digital asset-backed ETPs. This is the just starting point for many of our clients.”

Hyphe Markets GmbH, the German subsidiary of Amsterdam-based digital asset liquidity provider Hyphe, has been granted a BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) license.

The issuance of this license positions Hyphe Markets GmbH as an ‘Investment Firm’ according to the German Securities Institutions Act (WpIG) and European Investment Firm Regulation (IFR), enabling it to provide trading services to regulated financial institutions in Germany.

Hyphe offers price discovery, and API-based trading, and settlement

Germany’s robust regulatory framework classifying crypto assets as financial instruments under full supervision sets it apart in Europe. Hyphe Markets’ BaFin license signifies adherence to the highest regulatory standards available ahead of the forthcoming EU MiCA (Markets in Crypto-Assets) regulation scheduled for late 2024.

Notably, Germany’s classification of both tokenized securities and crypto assets closely aligns with Hyphe’s strategic vision of delivering institutional-grade liquidity across a burgeoning ecosystem of digital and digitized assets, with both asset types tradable on the same infrastructure rails.

Hyphe introduced its proprietary price discovery technology, Clear-Calculus, last year, complementing its product suite that encompasses trading and settlement through APIs and integration with institutional-grade systems. The newly granted BaFin license empowers Hyphe’s German subsidiary to directly introduce the company’s trading solution to the German market.

Hyphe for retail brokers, asset managers, and servicing ETPs

Dolf Diederichsen, Co-Founder & CEO of Hyphe, expressed his satisfaction, stating, “I’m pleased we can now help German institutions launch and sustain the digital asset products and services that their customers want to see. Whether it’s straightforward retail brokerage, automated execution for asset managers, or servicing digital asset-backed ETPs. This is the just starting point for many of our clients.”

The potential impact of tokenization of securities on investment and investor access is also emphasized. Diederichsen stated, “Looking ahead, tokenization of securities will hugely impact both the machinery of investment and the access provided to investors, bringing greater efficiency, greater transparency for investors, and many more liquid markets. A new investment ecosystem is taking shape around us, and we see Hyphe as a key part of the infrastructure.”

With its BaFin license, Hyphe Markets is well-positioned to address the demand from German banks, brokers, and asset managers for highly-regulated digital asset liquidity. Jürgen Kudszus, Co-founder & COO of Hyphe Markets GmbH, noted the significance of Germany’s role in embracing digital assets within the financial landscape: “Germany is in many ways the most exciting market in Europe. Regulatory oversight from BaFin has given the banking industry confidence to develop in this direction; and it’s not just fintechs embracing the opportunities offered by digital assets, but traditional institutions too, with every expectation of the highest possible standards.”

Hyphe, headquartered in Amsterdam, is a digital asset liquidity provider catering to European financial institutions. It offers access to a proprietary liquidity pool and trading platform featuring a range of digital currencies, including Bitcoin and Ethereum. The company’s price discovery technology, Clear-Calculus, provides continuous fair market price updates for assets, 24/7. Hyphe has been registered with the Dutch Central Bank (DNB) as a cryptocurrency service provider since 2020, and Hyphe Markets GmbH operates as an Investment Firm under the regulatory oversight of BaFin.

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