Interactive Brokers Group Inc. – a trading firm based in Greenwich, Connecticut – is opening its new cryptocurrency division.
Interactive Brokers Says “Yes” to Digital Currency
Customers of the firm will soon be able to trade and buy up to four different cryptocurrencies. They are bitcoin, bitcoin cash, Ethereum, and Litecoin. The company has stated that competition is growing given that many standard banks, hedge funds, and financial institutions are seeing their clients demand crypto service more and more, and thus they are working to initiate crypto custody and trading options to keep whoever’s already onboard from moving their money.
Interactive Brokers will be offering crypto services through its new partnership with Paxos Trust Co. The company is looking to make most of its money primarily through transaction fees. They will amount to as little as 0.12 percent or as much as 0.18 percent depending on the transaction. Thus, the max 0.18 would require individuals to pay as much as $1.80 for every $1,000 in crypto traded.
This may not seem like much on paper, but when one considers that the company has more than 1.5 million customers and that many are already engaged in crypto trading, there is a good amount of money to be had. Steve Sanders – the executive vice president of marketing and product development at Interactive Brokers – explained in a recent interview that while the company is only starting out with four digital assets, there is always the chance that executives will add more in the future.
We started with four that we thought were the basics. It could be the case that we expand that. We view crypto as just another asset class.
The decision comes at a time when crypto is getting a lot more attention from U.S. regulators such as the Securities and Exchange Commission (SEC). Gary Gensler is the head of that agency, for example, and recently commented that crypto trading platforms and exchanges are not likely to experience high levels of trust in the future unless they are willing to comply with set regulations.
We’ll Comply If and When We Have To
Sanders is not worried about this, claiming that Interactive Brokers already offers many other asset classes that require it to follow tough regulations. He says:
As the regulatory environment emerges, we’ll be there to work with it. We offer all these asset classes: stocks, options, foreign exchange, futures, bonds, and metals. We work with a lot of regulators.
It is clear as of late that many standard financial enterprises are feeling the pressure to step into the crypto market. Recently, Allied Payment Network and Finastra announced that they were creating a digital currency wallet designed specifically for banks, while digital financial platform Money Lion is establishing a whole new digital currency division for its clients to enjoy.