StoneX Executes First Bitcoin Swap As Firm Looks to Grow Crypto Dealings

The company has deep expertise in foreign exchange markets, which it hopes to port into the digital assets space

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Blockworks exclusive art by axel rangel

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key takeaways

  • The derivative was a cash-settled bitcoin swap denominated in US dollars
  • It’s the first step toward building out a growing crypto business line that would likely include market making

Derivatives specialist StoneX Group has pulled off its first US dollar-denominated bitcoin swap, joining a growing cadre of legacy financial players making first forays into crypto markets. 

A subsidiary, StoneX Markets, made the cash-settled swaps — derivatives contracts that exchange two financial instruments at a predetermined time — available to clients earlier this month, a company executive told Blockworks.

The trade’s counterparty was Liquidity Solutions Global, a subsidiary of London-based DriveWealth Holdings that provides digital asset liquidity.  

For StoneX, which has been exploring the digital assets space for years, the move is the first step in building out an institutional-grade crypto book, Eric Donovan, the company’s global head of institutional foreign exchange trading, told Blockworks.

StoneX’s Eric Donovan

The expansion, which StoneX views as a viable source of revenue down the line, is likely to include a spot crypto trading product that will act as a market maker, providing liquidity to institutions, including hedge funds, trading digital assets. The company could partner with a major crypto custodian to safekeep its client assets. 

The financial services firm has already been acting as a fiat off-ramp for crypto companies shut out from the traditional banking system due to regulatory matters, Donovan said. That includes providing foreign exchange trading for currencies worldwide. Digital assets exchanges, for instance, may take in currencies from around the world, but prefer to keep dollars and euros on their balance sheets  — making a conversion at a decent exchange rate a must. 

“The place that we occupy in the market is that when you look at a multi-asset advisor or a multi-asset fund, they may be in equities,” Donovan said. “They may be in commodities. And they want some exposure to crypto. We think that is a huge growth area.” 

StoneX joins other Wall Street players, including Goldman Sachs, in setting up in-house crypto trading operations. Goldman has both originated a bitcoin-backed loan and traded non-deliverable bitcoin options. 

For StoneX, part of the delay has been waiting for ample liquidity in options markets for digital assets. In addition to offering derivatives on other cryptocurrencies, including ether, the firm will in the future look to trade so-called “crosses” or exchanges between digital assets — or digital currencies to fiat and vice-versa, Donovan said.

“Crypto is not just in the United States,” he said. “It’s in the whole world. And we need to be able to denominate assets against every other fiat currency in the world.”


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