BlackRock to offer crypto trading services

BlackRock to offer crypto trading services

BlackRock to offer crypto trading services

BlackRock (NYSE:BLK) is planning to provide cryptocurrency trading services to its investor clients, three people with knowledge of their plans reported to CoinDesk.

Clients would be able to get loans from BlackRock by pledging cryptocurrency assets as collateral. According to one of the sources, the New York-based company plans to enter the cryptocurrency space with “client support trading and then with their own credit facility.”

BlackRock is the world’s largest asset manager, serving over 1,500 institutional clients with $10 trillion in assets.

One of the sources said BlackRock’s institutional clients, which includes public pension plans, endowments and sovereign wealth funds, will be able to trade cryptocurrency through BlackRock’s comprehensive risk analytic platform Aladdin (Asset, Liability, Debt and Derivative Investment Network).

Another spokesperson reportedly said BlackRock is interested in becoming “hands-on with outright crypto” and is “looking at providers in the space.”

A third spokesperson claimed that BlackRock has a working group of “approximately 20” to evaluate Bitcoin and other cryptocurrencies:“They see all the flow that everyone else is getting and want to start making some money from this,” the source said.

BlackRock declined comment, and the timetable for introducing the new service is unknown.

The firm has been making moves in this direction since last year. In May, Reuters reported that BlackRock CEO Larry Fink said the company was studying Bitcoin to determine whether it could offer “countercyclical benefits,” and that cryptocurrencies could potentially play a long-term investment role similar to gold.

And last June, BlackRock began searching for a director-level Aladdin blockchain strategy lead to “evaluate different blockchain protocols/platforms to explore solution alternatives.”

A spokesperson at the time said the new hire would “build out our expertise and execution capabilities in the distributed ledger technology space… this hire will allow us to increase our focus and capacity.”

In January, the company announced it would file an application with the U.S. Securities and Exchange Commission to launch its iShares Blockchain and Tech ETF, which would invest in U.S. and overseas companies involved in the “development, innovation, and utilization of blockchain and crypto technologies.” If approved, it would be the BlackRock's, and possibly the country’s first crypto-based ETF.

It also holds a stake in MicroStrategy, the largest corporate holder of Bitcoin. Its CEO, Michael Saylor, is a vocal advocate of Bitcoin as the future of money.

BlackRock isn’t alone in its cautious moves into the crypto space. Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS)and Citi (NYSE:C) have also begun dipping their toes into crypto’s waters.

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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