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.

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FalconX plans to utilise Standard Chartered’s banking and forex services, including its extensive currency portfolio, to enhance its offerings to institutional clients, according to Matt Long, FalconX’s APAC & Middle East General Manager. “By enabling more efficient fiat currency settlements, our clients will experience quicker settlements, improved capital efficiency, and significantly reduced operational risk,” Long explained to Reuters.

FalconX, a California-based firm specializing in crypto-focused prime-brokerage services, boasts clients ranging from some of the largest global asset managers and sovereign wealth funds, to hedge funds and family offices. The primary motivator behind Standard Chartered’s partnership with FalconX is the increased adoption of digital assets by its institutional clients.

Luke Boland, Asia’s head of fintech at Standard Chartered, revealed that the partnership with FalconX will kick off in Singapore and then expand to other countries in Asia, the Middle East, and the United States. The bank, headquartered in Hong Kong, has been progressively broadening its digital asset operations. It launched a digital asset custody service in the United Arab Emirates last year and collaborated with digital exchange OKX in April to allow institutional clients to use cryptocurrencies as collateral.

Following the election of crypto-friendly Donald Trump as U.S. president, the global cryptocurrency market surpassed $3 trillion in market value in November. This has sparked hopes of a golden era for digital assets. Standard Chartered predicts the overall value of digital assets will reach $10 trillion by 2026.

Founded in 2018, FalconX was last valued at $8 billion after a $150 million funding round in 2022. Its backers include Wellington Management, Singapore’s sovereign wealth fund GIC, and Tiger Global Management.

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