LMAX Group Launches Digital Asset Collateral Solution for Institutions

Global cross-asset marketplace LMAX Group has launched Kiosk, a hosted portal that lets institutional clients deposit digital assets into LMAX Custody and use them as collateral to trade across its FX, metals, derivatives and crypto markets.

The product allows clients to post digital assets as collateral for spot foreign exchange, precious metals, contracts for difference, perpetual futures and digital assets, the company said Tuesday.

Kiosk includes tools for deposits, withdrawals, API credential management, WalletConnect, security controls and treasury management, according to LMAX.

The launch is part of LMAX’s broader push to connect traditional and digital markets by allowing crypto holdings to support trading activity across multiple asset classes.

“Hyper-efficient collateral will be the foundation of modern, converged capital markets,” said David Mercer, CEO at LMAX Group, adding that the new platform offers a compliant way for institutions to “integrate digital assets into their core trading infrastructure.”

The new platform is part of a broader trend to build more onchain collateral assets, following similar initiatives from institutions such as the Depository Trust & Clearing Corporation (DTCC) and Franklin Templeton. 

LMAX Digital cryptocurrency platform. Source: Lmaxdigital.com

Institutions are experimenting with onchain collateral

Some of the largest financial institutions are experimenting with tokenized securities and onchain collateral assets.

Earlier in February, investment manager Franklin Templeton announced the launch of an institutional collateral program with crypto exchange Binance, which lets clients use tokenized money market fund (MMF) shares as collateral for trading activity, while the underlying assets remain in regulated custody, Cointelegraph reported.

Franklin Templeton said the model was designed to let institutions earn yield on regulated money market fund holdings while using the same assets to support digital asset trading, without giving up existing custody.

Related: Capital B raises $17.8M to expand its Bitcoin treasury

On May 4, the DTCC announced plans to launch a pilot for trading tokenized securities in July, aiming for the full launch of the service in October, Cointelegraph reported. DTCC said the service will offer tokenized real-world assets with the same investor protections and ownership rights as the assets held in traditional form.

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