Investment decision Lender Cowen Launches Electronic Asset Unit

Christina Lobo

U.S. total-services financial investment bank Cowen Inc. (COWN) introduced on Wednesday, March 23, that it has released a devoted digital asset division, turning out to be the most up-to-date Wall Road lender to enter the rising cryptocurrency area.

Important Takeaways

  • Cowen has launched a new electronic asset division named Cowen Digital.
  • The unit will supply buying and selling to institutional clients in set up cryptocurrencies and offer a custody provider.
  • Cowen has future plans to branch out into crypto derivatives, lending, DeFi, and NFTs.
  • Cowen suggests its smaller sized dimension allows it to adapt immediately to evolving crypto regulations.

The new unit named Cowen Digital will allow for the bank’s institutional investors to trade established cryptocurrencies, like Bitcoin, Ethereum, and Solana. It will also provide a custody answer to shop digital assets by means of Standard Custody & Trust Co.

“Via Cowen Electronic, our shoppers now have access to the crypto and digital asset marketplaces with our institutional high quality and entirely integrated finish-to-finish execution and custody capabilities,” Jeffrey Solomon, Cowen’s chair and CEO, claimed in a statement. “Cowen is committed to outperforming for its customers by keeping at the forefront of innovation,” he added.

The financial institution has used 15 months developing the vital units and infrastructure to launch the division, according to the statement.

Plans for Other Crypto Expert services on the Horizon

Cowen Digital—to be led by the bank’s former fairness derivatives head Dan Forman—intends to improve its first headcount from close to 40 to additional than 100 personnel associates in the near term and has ideas to branch out into crypto derivatives, lending, decentralized finance (DeFi), and non-fungible tokens (NFTs).

The announcement comes a month soon after U.S. banking large JPMorgan Chase & Co. (JPM) released into the metaverse by opening a lounge in the blockchain-centered virtual world of Decentraland. In the lounge, shoppers can invest in digital plots of land with NFTs and invest in other services employing cryptocurrency. Much more lately, New York-centered financial investment financial institution The Goldman Sachs Team, Inc. (GS) continued its thrust into cryptocurrencies, executing an more than-the-counter (OTC) crypto options trade facilitated via electronic asset financial commitment company Galaxy Digital—the to start with transaction of its form by a important Wall Avenue lender.

Overall property locked in DeFi platforms have risen from about $600 million in 2020 to over $200 billion as of March 2022.

Regulatory Gain

Lack of regulatory clarity encompassing cryptocurrencies has led to sluggish uptake of electronic currencies by Wall Street financial institutions. Nevertheless, a the latest govt order by President Joe Biden to assess the dangers and advantages of the nascent industry may perhaps present a a great deal-essential framework for economical institutions to comply with.

Cowen believes that its scaled-down sizing enables it to adapt quicker than its more substantial rivals to evolving crypto laws. “We have a major 1st-mover gain in this space,” the bank’s co-president Dan Charney informed Bloomberg in an job interview. “Mainly because of our tradition, we’re in a position to work with our legal and compliance and our regulators in a way that maybe our even larger opponents are not, and we are just capable to get to remedies more quickly,” he included.

On March 9, President Biden signed a long-awaited govt order instructing federal companies to analyze many impacts of cryptocurrency use. The purchase will activity regulators with examining threats to consumers, investors, and the broader financial state.

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