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- RULEMATCH launches cryptocurrency trading platform for banks, with BBVA among the first users, boosting institutional adoption of cryptoassets.
- RULEMATCH’s platform offers multilateral net settlement and operates with Nasdaq technology, representing an innovation in cryptocurrency trading.
Today, Zurich-based RULEMATCH launched a cryptocurrency trading platform aimed at banks and securities firms. Among the institutions that are using the platform since its launch are BBVA, DLT Finance and one of the Swiss cantonal banks. Initially, the platform supports Bitcoin and ETH trading against USD.
New Era in Cryptocurrency Trading for Financial Institutions
RULEMATCH acts only as a venue and does not participate as a principal in transactions. Its backers include Flow Traders, one of the market makers on the platform, as well as Bankhaus Scheich.
Michael Lie, Global Head of Digital Assets at Flow Traders, commented on their involvement from day one:
“By being present from the start, we can provide the institutional-grade liquidity that financial institutions desire to support the adoption of digital assets and contribute to improving the broader financial ecosystem.”
RULEMATCH: A Familiar Platform for Traditional Institutions
RULEMATCH operates in a way that traditional financial institutions (TradFi) find more familiar. For example, it provides multilateral net settlement. This occurs on a T 1 delivery versus payment basis using bank money rather than stablecoins.
Nasdaqtrading technology is used by RULEMATCH, while Luzerner Kantonalbank handles the cash and, for custody, uses segregated portfolios in Metaco’s Harmonize.
David Riegelnig, CEO of RULEMATCH, highlighted the growing activity of banks and other financial institutions in the crypto market, often overlooked.
“However, as we all know, they have faced challenges due to many fundamental deficiencies in the existing market infrastructure: capital efficiency, counterparty risk, compliance and latency. At RULEMATCH, these banks and their institutional clients are expanding their activities and deploying many of the same strategies they have used in traditional markets.”
Regulation and Risk in the Era of Crypto Trading
While banks prefer to participate in regulated venues, in Switzerland, RULEMATCH may not require a trading license because it only provides a venue for cryptocurrencies, not securities.
As for an AML license, it is not registered with a self-regulatory organization (SRO) but does not need one because it only deals with institutions. Also, although client portfolios are segregated, RULEMATCH is effectively the custodian.
Again, in Switzerland, it might not need a license, but from a bank due diligence perspective, there is limited regulatory oversight. Therefore, it is not completely risk-free. In the United States, institutional cryptotradingvenue EDX Markets provides custody of third-party digital assets.
Momentum needed in crypto trading
The participation of BBVA and other major banks in RULEMATCH demonstrates a significant shift in the institutional adoption of cryptocurrencies. This platform not only provides an opportunity for traditional financial institutions to engage in cryptocurrency trading in a more familiar and efficient way, but also addresses key challenges such as capital efficiency, counterparty risk and compliance .
Despite the regulatory risks, the RULEMATCH initiative marks a step forward in the evolution of cryptocurrency trading, opening new avenues for the integration of traditional finance with digital innovation.
