FalconX, a renowned prime brokerage for digital assets, has reported trading volumes exceeding $1.5 trillion. The company is now joining forces with Crypto.com, along with Galaxy, Wintermute, and others, as a launch partner for Lynq. This platform aspires to be a settlement layer for digital assets and financial institutions. The introduction of Lynq could highlight the escalating institutional curiosity in digital assets as regulatory frameworks become increasingly clear.
Claiming access to over 400 tokens, FalconX will function “both as a participant and a liquidity provider in the Lynq network,” as stated by Lynq CEO Jerald David. Lynq, created in collaboration with Arca Labs, Tassat Group, and tZERO Group, intends to offer a solution addressing the changing nature of regulatory structures and counterparty risk, based on a recent announcement. Such issues could be crucial for institutions adhering to stringent regulations and aiming to introduce crypto products.
In the crypto arena, settlement is the ultimate step where the funds are transferred between parties, and the transaction is documented on the blockchain. Examples include the transmission of tokens from one party to another, the release of collateral stored in a contract, and token generation events where tokens are distributed automatically to investors.
Web3 company Anchorage Digital, which serves institutions, owns an institutional settlement network named Atlas. London-based crypto firm BVNK actively participates in various crypto settlement procedures. Examples of blockchain-based settlement networks are Kinexys by J.P. Morgan and the “Project Ion” platform by a leading US equities clearinghouse.
Concerning the Lynq platform, David mentioned, “access to the Lynq Network is free for participants, and the transactions on the network are not subject to transaction fees. Lynq’s revenue is generated by taking a small amount of interest from the portfolio.”
The platform is scheduled to start its final user acceptance testing phase this Friday.
The upcoming launch of Lynq may indicate a surge in institutional interest in digital assets, particularly stablecoins, which are increasingly used in settlement processes. As per DefiLlama, the market cap of stablecoins reached $251.4 billion as of Tuesday, marking a sharp 55.5% rise within a year.
Stablecoins offer advantages over traditional fiat currency, including reduced transaction costs, quicker settlement times, and enhanced liquidity. These advantages become more pronounced in cross-border transactions or in countries where reserve fiat currencies, such as the US dollar, are scarce.
A recent survey by Fireblocks revealed that 90% of institutions are either using or planning to use stablecoins. The Wall Street Journal reported in May that several prominent US banks were discussing the possibility of issuing a joint stablecoin.
