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UBS Mulls Offering Prime Brokerage Services for Crypto ETPs to European Hedge Funds: Sources

UBS Group’s prime brokerage unit has began to supply the clearing and settlement of crypto exchange-traded merchandise (ETPs) to a really restricted variety of purchasers, in line with two folks with information of the matter.

The Swiss financial institution is working a pilot scheme and the matter is being reviewed internally, forward of a deliberate wider rollout later within the yr, one of many sources mentioned.

UBS isn’t alone in making such a transfer. Each Goldman Sachs and Financial institution of America, as reported by CoinDesk final week, have additionally been providing the clearing and settlement of cryptocurrency ETPs for hedge funds, as monetary establishments proceed to make tentative steps towards the adoption of crypto. Banks are eager to keep away from lacking out on a doubtlessly profitable income stream as extra purchasers search entry to the sector.

Financial institution of America has additionally accepted the buying and selling of bitcoin futures for some purchasers and is clearing cash-settled contracts.

For UBS, the most recent improvement comes regardless of the corporate’s acknowledged warning concerning crypto. In a latest word to purchasers UBS raised considerations over the character of crypto markets and up to date regulatory developments.

“Regulators have demonstrated they’ll and can crack down on crypto,” UBS mentioned in a report. “We recommend buyers keep clear and construct their portfolio round much less dangerous belongings.”

Clearly, these considerations haven’t prevented some UBS purchasers from eager to get in on the motion or deterred UBS from contemplating obliging them.

A UBS spokesperson declined to remark.

Beforehand, the financial institution has mentioned that it was monitoring the developments within the area of digital belongings carefully and that it was most within the expertise that underpins digital belongings, specifically distributed ledger expertise.

Bitcoin, the world’s oldest crypto, rose again above $40,000 this week, following a subsequently denied report that Amazon was trying to settle for bitcoin funds by the top of the yr and was additionally contemplating minting its personal token by 2022.

“However our curiosity within the area, the hypothesis that has ensued round our particular plans for cryptocurrencies will not be true,” an Amazon spokesperson informed CoinDesk by electronic mail Monday. Individually, Amazon did say final week that it’s trying to rent a “digital forex and blockchain product lead.”

Source: CoinDesk

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