TradeStation Crypto, the cryptocurrency-focused subsidiary of the TradeStation Group, has been teasing a crypto lending service for a while. The service is finally here, with the firm announcing a partnership that will allow customers to access easy credit facilities.
An Alliance to Move Forward
According to a press release published earlier this week, TradeStation Crypto has partnered with digital financial institution Zero Hash to launch a digital asset loan service. The release explained that Zero Hash would help manage TradeStation Crypto’s loan book, while also providing crypto settlement services and opening the latter up to several markets and liquidity venues.
A subsidiary of Seed CX, Zero Hash is an application programming interface (API)-driven loan service. It is registered as a Money Service Business and FX dealer with the Financial Crimes Enforcement Network (FinCEN), and the firm is set to use its infrastructure to help TradeStation automate the loan settlement and collateral management services. By doing this, TradeStation can accept several forms of collateral and manage any counterparty risk.
TradeStation will benefit from Zero Hash’s ability to support spot settlement for digital and fiat assets. In the coming months, the firm also plans to launch forwards, repo, and other product types.
James Putra, Senior Director of Product Strategy at TradeStation Crypto, said of the deal:
“The Crypto lending space has experienced great growth in 2020, driven by attractive yields on crypto-asset loans. There is a need for automation in the crypto lending space. Automation is the only way to bring scale and achieve higher levels of institutionalization in the marketplace.”
Something for Everyone
TradeStation has been teasing a crypto lending service for months. Back in July, the firm’s parent company the Monex Group, revealed on its earnings report for Q2 2020 that it would launch “Crypto Earn,” a C2B2B lending service that will borrow assets from clients and lend them to institutional investors.
Following the launch of TradeStation Crypto’s online crypto brokerage platform last year, the parent company was looking to expand its cryptocurrency offering. To that end, it launched a dedicated trading app in July as well, with support already across 40 states in the U.S.
The firm didn’t renege on its promise to institutional investors. Edward Woodford, Zero Hash’s co-founder and CEO, said in the press release that there is a dedicated trading platform for these investors.
“TradeStation Crypto is paving the way for institutional firms to engage in crypto lending. This lending product is one of the most exciting innovations in the space.”
The press release also notes that the lending tool has features that are tailor-made for crypto traders. For instance, the platform uses global integrations to create vast liquidity sources to bolster transparency and price discovery.
There is also a crypto helpdesk that reduces transaction times and fees that traders would have otherwise had to pay on traditional crypto exchanges – especially when it comes to large-volume trades.