RULEMATCH Spot On – Institutional Crypto Integration
With Anton Katz
13 November 2024
Ian Simpson | 3min read
Across the wide, global landscape of crypto markets, financial institutions often face challenges in connecting to venues, managing liquidity and coordinating order flows. To tackle this challenge they often to turn to order management systems providers like Talos.
But as the industry gets more sophisticated and complex, the scope of services offered has to keep up as well. As it develops to keep up with demand, Talos and its Co-founder/CEO Anton Katz have collected unique insights on needs and preferences of financial institutions who are expanding their operations.
In this episode of RULEMATCH Spot On, host Ian Simpson discussed the state of liquidity in crypto, the developing institutional crypto space as well as Talos’s expanding feature set with a view towards new business opportunities and the coming world of tokenization.
Episode show notes:
(1:16) Intro
(2:16) A Talos perspective on crypto liquidity fragmentation
(4:26) Anton’s view on the future of fragmentation
(4:55) The incentive to split off liquidity
(6:09) Where Talos stands at the entrance to a fragmented market
(6:56) The most common question from Talos clients
(7:46) How smaller (and bigger) players are trying to take advantage
(9:19) Fragmentation of the stablecoin space
(10:58) The urge to use stablecoins for settlement and other use cases
(13:38) The main trend among stablecoins
(14:03) “Old-fashioned” stablecoins for the risk-averse
(14:38) Top considerations for choosing a venue
(16:45) Order types as a key point
(17:09) KYC or KYV for venues
(18:18) The consideration of post-trade options for choosing a venue
(19:16) Risk as a sizing function
(19:54) Why people forget about counterparty risk
(20:51) Comparing market models in crypto
(23:04) Possibilities for M&A among trading venues
(24:22) How Talos’s focus is changing over time
(25:34) Connectivity moving towards “plug and play”
(27:15) How latency is changing the game
(28:31) Differences in alpha
(29:15) Why TCA is becoming so important
(29:51) Evaluating market needs over time
(31:13) Why liquidity providers also need TCA
(31:52) Progression in TCA tooling and wash trading detection
(35:10) Fragmentation among settlement models
(36:56) How prime brokers are helping out
(37:28) “One-click settlement”
(39:43) Demand for various settlement models
(40:59) Tools to handle the flood after ETF approvals
(41:20) Talos’s tools with traditional asset classes
(43:13) Diving into PBs
(44:49) Rivalry between PBs and exchanges
(47:12) An opportunity for banks as prime brokers
(49:10) Will regulation change the venue landscape?
(52:40) The shadow of MiCAR
(55:19) Working with clients on compliance regulation
(55:45) Remembering the advantages of regulation
(56:20) Peering into the future with tokenization
(58:29) Fireblocks and Talos with broad network “distribution”
(1:00:24) Looking into the crystal ball with stablecoins and lending/borrowing
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