TradeStation Group’s crypto-focused subsidiary, TradeStation Crypto, has been running tests for a crypto lending service for some time now. Now, the firm has officially made an announcement about a partnership that would allow customers to get access to credit facilities easily. Earlier this week, a press release was published, which highlighted that Zero Hash, a digital financial institution, had partnered with TradeStation Crypto for launching a digital asset lending service. According to the release, Zero Has would assist TradeStation Crypto in managing the loan book. Simultaneously, they would provide crypto settlement services that would open TradeStation Crypto up to numerous liquidity venues and markets.
Zero Hash is a subsidiary of SEED CX, and this loan service is driven by an application programming interface (API). It is registered with the Financial Crimes Enforcement Network (FinCEN) as an FX dealer and Money Service Business. The company will make use of its infrastructure for helping TradeStation in automating its collateral management and loan settlement services. This would enable TradeStation to accept different forms of collateral and also manage counterparty risk. Zero Hash’s ability for supporting spot settlement for fiat and digital assets can also benefit TradeStation. The company also intends to launch repo, forwards, and other product types in the coming months.
TradeStation Crypto’s Senior Director of Production Strategy, James Putra said that 2020 had been good year for the crypto lending space, as crypto-asset loans provided attractive yields. He said that automation was needed in this space because it could bring scale and lead to higher levels of institutionalization. For months, TradeStation had been giving hints of a crypto lending service. Their parent company, the Monex Group had revealed in July that they would be launching a C2B2B lending service called ‘Crypto Earn’, which will borrow assets from customers and lend them to institutional investors.
After they had launched the online crypto brokerage platform of TradeStation Crypto last year, the parent company wished to expand their crypto offerings. In order to do so, they had introduced a dedicated trading app back in July, which was supported in nearly 40 states in the United States. The firm also fulfilled its promise to institutional investors. The chief executive and co-founder at Zero Hash, Edward Woodford, stated in a press release that these investors would also get a dedicated trading platform. He said that the company was paving the way for institutional lenders to also benefit from crypto lending services.
He noted that their lending product was one of the most exciting innovations to be made in this space. It was also noted by the press release that the features of the lending tool have been specially developed for crypto traders. For instance, vast liquidity sources are created by the platform by using global integrations for bolstering price discovery and transparency. Moreover, a crypto helpdesk has also been created for reducing transaction times, along with fees that would otherwise have to be paid by traders on traditional crypto exchanges, particularly when it comes to trades in large volumes.