Sofiko is a freelance fintech copywriter at Coinspeaker. With a Bachelor degree in International Business and Economics, Sofiko has been deepening her knowledge of an agile innovative industry primary focusing on the robust blockchain technology and cryptocurrencies. As a bank employee, Sofiko particularly keens on crypto and blockchain integration into the established banking systems.
Owing to a recently signed partnership between blockchain custodian BitGo and over-the-counter exchange Genesis, there is no need to lose time transferring your crypto-assets from a cold wallet to the exchange as you can trade directly from BitGo.
Time is money and in business, money solves everything especially when you are doing business in such a volatile market as the crypto is. Experienced industry investors are very well aware of a price behind every minute lost in grappling with transaction delays. At the times of major price swings shattering the market almost on daily basis, you have to be flexible.
However, you also want to be secure, but once you withdraw your money from a safe cold wallet putting them onto an exchange for trade, you automatically are getting exposed to vast swaths of hackers and cyber-criminals who continue to terrorize the entire crypto-community. When you are talking millions, there is no room for unsafety.
If only you could trade from cold storage without the need to move money back and forth between an exchange and custodians. It looks like a train of thoughts that has crossed the minds of crypto-custody firm BitGo and over-the-counter exchange Genesis when they were negotiating the terms of a partnership.
No Need for Hot Wallets
According to the recently announced partnership of BitGo and Genesis, investors who store their assets with BitGo custody services don’t have to open an additional account at Genesis as they can trade directly from their safely locked BitGo storage. This announcement means the end of cumbersome and time-consuming money transfers from the custodian wallets to an exchange as the crypto-market embraces the new stage of financial maturity, settlements and clearing processes. Today investors can trade cryptos just like any other traditional financial asset — fast and secure.
Speaking of the process, BitGo and Genesis explain the concept as follows: BitGo’s users who want to trade some of their crypto-assets get a quote via Genesis and sell the predefined amount immediately. The moment the client agrees on the trade, BitGo locks up the assets and holds them to give to Genesis, which initiates a U.S. dollar bank wire to BitGo.
Once the wire goes through, the transfer is settled on BitGo’s books, without anyone having to take the coins out of storage – which can take 24 hours or more – and without the transaction has to be recorded on the public ledger.
BitGo CEO, Mike Belshe comments: “We can actually do real-time settlement; we can use digital tokens for dollars and we can use them for digital tokens that you trade. We can do swaps with zero counterparty risk.”
Pursuing Institutional Whales
Both BitGo and Genesis agree that this partnership is seeking to address the institutional audience in the first place. Having resolved the time-lag cold storage problem as well as counterparty and settlement risk associated with some OTC crypto-trading, the two firms are trying to lure huge players who are likely to be involved into over-the-counter markets due to its excessive liquidity.
Previously BitGo has already attempted to draw institutional attention to its blockchain security firm. Coinspeaker reported that BitGo has listed an array of stable coins that are of much interest for investors. The BitGo’s latest inclusion is Gemini Dollar (GUSD).
It is worth mentioning that in September BitGo has also received official regulatory approval as a qualified custodian of digital assets. The BitGo Trust Company got an official license from the South Dakota Division of Banking. BitGo’s chief compliance and legal officer Shahla Ali said that the company can now pitch regulated storage solution to institutional investors.