Capital Markets Meet Crypto: How FIS and Ledgible Bridge the Gap between Digital Assets and Traditional Finance

QUICK TAKE

  • FIS and Ledgible have partnered to help clients swiftly and securely navigate the bridge between traditional and digital assets. Capital markets firms can now start or continue their transformation journey with relative ease when it comes to post-trade data integration.
  • Partnerships that deliver innovative technology solutions and services mark a paradigm shift in institutions’ abilities to manage crypto and digital assets in their portfolios

Digital assets have historically been seen as the wild west of investing – but times are changing. A recent survey from State Street of institutional investment leaders and managers found that 81 percent  will increase or start their investment in crypto in the next three years, with 56 percent believing that crypto will become viewed as just another asset class in that time period. 

For crypto enthusiasts and believers in the DeFi ecosystem, this is great news – but ensuring adoption means building strong foundations, pathways, and technology that bridges the gap between crypto and traditional finance. 

FIS, one of the largest providers of traditional banking, capital markets and payments technology in the world, also supports four out of the top five crypto exchanges. For its part FIS understands that while there are significant challenges in adoption of crypto currencies, a large part of the financial marketplace of the future will be conducted on blockchain. That is why it has aligned with specialist partners in the crypto space – such as crypto tax and accounting software platform, Ledgible, and enterprise-grade digital asset investing and wallet technology provider Fireblocks, in order to help accelerate crypto and digital asset adoption capabilities for clients.

Cryptocurrencies present several challenges for traditional financial services firms: non-standard naming convention, 24/7 trading, increasingly complicated transaction types, fragmented liquidity, and variable revenue streams to name a few. Without the proper tools, institutional crypto adoption may feel a little like fitting a square peg into a round hole. According to John Avery, head of digital assets for FIS capital markets, one of the challenges traditional firms face when entering these markets was that it often requires them to use one-off solutions or manual processes to get them up and running. “What we learned from our clients was that most want to operate at scale from ‘Day one’ of operation, not 12 months down the road”. 

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To support at the required scale, systems ranging from Trading and Risk to Treasury and Accounting will each need to be “crypto enabled” – whether extending decimal precision, messaging into new trading venues, or supporting new concepts like hard forks or airdrops. In addition, those systems will need to connect with the fragmented and constantly evolving world of digital asset liquidity. Only by solving both can traditional financial firms support digital assets using existing technology and operational teams.

To help turn this concept into reality, FIS and Ledgible provide a single, normalized source of post-trade data to capture all that is necessary to properly account for digital assets no matter where a firm chooses to trade. By using this new source of data for digital assets, firms can easily connect the wide array of centralized exchanges, liquidity providers, Defi protocols, blockchains and custodians in the crypto space into the many downstream accounting and risk platforms that need to consume such information. Combined with a significant FIS investment to support digital assets natively in its core systems, the two firms hope to offer as close to a turn-key solution as possible for their buy and sell side clients moving into crypto and digital assets.

Both crypto enthusiasts and more reticent firms do agree on one thing: that the world is still in the initial stages of crypto adoption. Firms looking for new growth opportunities can get an easy head start on the transformation journey – from day one to full maturity with FIS and Ledgible, we simplify the complex and help accelerate time to market.

 

This post is commissioned by Ledgible and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.


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