FalconX is a digital asset major brokerage that claims to have executed over $1.5 trillion in trading volume. It has joined companies like Crypto.com, Galaxy, and Wintermute to become a launch partner of Lynq. Lynq is a platform designed to provide a settlement layer for digital assets and financial institutions. The launch of Lynq may highlight the growing interest of institutions in digital assets as regulatory clarity improves.
Lynq CEO Jerald David told Cointelegraph that FalconX claims to have access to over 400 tokens and will "act as both a participant and a liquidity provider on the Lynq network."
According to an announcement on Tuesday, Lynq was developed in collaboration with Arca Labs, Tassat Group, and tZERO Group, aiming to provide solutions to the evolving regulatory framework and counterparty risk. These issues may be significant for institutions looking to comply with strict regulations and launch crypto products.
In the crypto space, settlement is the final part of the process where funds are transferred between parties and transaction records are made on the blockchain. Some examples include sending tokens from one party to another, releasing collateral stored in contracts, and token generation events, where tokens are automatically distributed to investors.
Web3 company Anchorage Digital, which specializes in serving institutions, has an institutional settlement network called Atlas. London-based crypto company BVNK is involved in various crypto settlement processes.
Some examples of blockchain-based settlement networks include JPMorgan's Kinexys and the "Project Ion" platform of the major U.S. stock clearinghouse.
Regarding the Lynq platform, David said, "Participants can access the Lynq network for free, and there are no transaction fees for trades on the network. Lynq's revenue comes from earning a small portion of interest from the portfolio."
The platform will begin its end-user acceptance testing phase on Friday.
The upcoming launch of Lynq may indicate a growing interest from institutions in digital assets, particularly in stablecoins, which are increasingly used in settlement processes.
According to DefiLlama data, as of Tuesday, the market capitalization of stablecoins reached $251.4 billion, a 55.5% increase over the year.
Stablecoins have some advantages over traditional fiat currencies, including lower transaction costs, faster settlement times, and improved liquidity. These advantages are particularly evident when dealing with cross-border transactions or in countries with a shortage of reserve fiat currency, such as the U.S. dollar.
According to a survey by Fireblocks, 90% of institutions are using or planning to use stablecoins. In May, The Wall Street Journal reported that several large U.S. banks were in preliminary talks to issue a joint stablecoin.
Related: High Risk, High Reward: Crypto Perpetual Futures Gaining Momentum in the U.S.
Original article: “FalconX Joins Crypto.com and Others as Partners in Lynq Institutional Settlement Network”
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