Bar­clays sound­ing out clients about crypto trad­ing

The Star Malaysia - StarBiz - - Digital Trend -

NEW YORK: Bar­clays Plc has been gaug­ing clients’ in­ter­est in the Bri­tish bank start­ing a cryp­tocur­rency trad­ing desk, po­ten­tially join­ing Gold­man Sachs Group Inc in pi­o­neer­ing a new busi­ness on Wall Street, ac­cord­ing to peo­ple with knowl­edge of the mat­ter.

Bar­clays has so far only done a pre­lim­i­nary as­sess­ment of de­mand and fea­si­bil­ity, said the peo­ple, who asked not to be iden­ti­fied be­cause the in­for­ma­tion isn’t pub­lic.

The bank said on Mon­day it cur­rently has no con­crete plans to start such an oper­a­tion.

“We con­stantly mon­i­tor de­vel­op­ments in the dig­i­tal cur­rency space and will con­tinue to have a dia­log with our clients on their needs and in­ten­tions in this mar­ket,” spokesman An­drew Smith said in an e-mailed state­ment.

A crypto trad­ing desk would re­quire ap­proval from in­vest­ment bank boss Tim Throsby, and po­ten­tially chief ex­ec­u­tive of­fi­cer Jes Sta­ley, given the nov­elty of the as­set class, risk and com­pli­ance re­quire­ments, ac­cord­ing to one of the peo­ple. No other big Euro­pean in­vest­ment bank is known to be build­ing such a desk.

Sta­ley has made build­ing up Bar­clays’s in­vest­ment bank the cen­tre­piece of his strat­egy to re­vive earn­ings. In Septem­ber, Throsby vowed to reignite the unit’s “com­mer­cial zeal” and au­tho­rised the trans­fer of bil­lions of dol­lars of cap­i­tal to higher-risk trad­ing ac­tiv­i­ties from vanilla cor­po­rate lend­ing.

Bit­coin – in­fa­mous for its wild price swings af­ter ris­ing to a peak of more than US$19,000 in De­cem­ber be­fore halv­ing in value within four months – could fit the bill.

De­mand for such ser­vices is plen­ti­ful. Hedge funds that deal with Bit­coin and other vir­tual cur­ren­cies have been ea­ger to find banks to han­dle trans­ac­tions – much like prime bro­kers do with se­cu­ri­ties – and po­ten­tially serve as cus­to­di­ans of dig­i­tal as­sets.

Some money man­agers have strug­gled to ex­pand into crypto, in part be­cause of rules that pre­vent them from us­ing un­reg­u­lated ex­changes to trade and hold in­vest­ments.

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