Investment Bank Cowen Launches Digital Asset Unit
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U.S. complete-support investment decision financial institution Cowen Inc. (COWN) announced on Wednesday, March 23, that it has released a dedicated electronic asset division, turning into the most current Wall Street bank to enter the rising cryptocurrency area.
Crucial Takeaways
- Cowen has launched a new digital asset division called Cowen Digital.
- The unit will offer buying and selling to institutional clients in established cryptocurrencies and deliver a custody company.
- Cowen has future ideas to branch out into crypto derivatives, lending, DeFi, and NFTs.
- Cowen states its more compact size permits it to adapt speedily to evolving crypto laws.
The new unit named Cowen Digital will let the bank’s institutional investors to trade recognized cryptocurrencies, which includes Bitcoin, Ethereum, and Solana. It will also offer a custody remedy to retail outlet electronic belongings by means of Conventional Custody & Believe in Co.
“By way of Cowen Electronic, our clients now have accessibility to the crypto and digital asset markets with our institutional top quality and absolutely integrated stop-to-end execution and custody abilities,” Jeffrey Solomon, Cowen’s chair and CEO, reported in a assertion. “Cowen is committed to outperforming for its purchasers by staying at the forefront of innovation,” he extra.
The lender has spent 15 months building the essential techniques and infrastructure to start the division, according to the statement.
Options for Other Crypto Expert services on the Horizon
Cowen Digital—to be led by the bank’s former equity derivatives head Dan Forman—intends to enhance its preliminary headcount from all around 40 to far more than 100 staff customers in the close to term and has designs to branch out into crypto derivatives, lending, decentralized finance (DeFi), and non-fungible tokens (NFTs).
The announcement comes a thirty day period right after U.S. banking big JPMorgan Chase & Co. (JPM) launched into the metaverse by opening a lounge in the blockchain-dependent digital earth of Decentraland. In the lounge, shoppers can invest in virtual plots of land with NFTs and buy other products and services employing cryptocurrency. Far more a short while ago, New York-centered investment decision financial institution The Goldman Sachs Team, Inc. (GS) continued its thrust into cryptocurrencies, executing an about-the-counter (OTC) crypto options trade facilitated via electronic asset financial investment organization Galaxy Digital—the very first transaction of its type by a key Wall Street lender.
Complete belongings locked in DeFi platforms have risen from all over $600 million in 2020 to over $200 billion as of March 2022.
Regulatory Advantage
Absence of regulatory clarity bordering cryptocurrencies has led to gradual uptake of electronic currencies by Wall Avenue banking institutions. Nonetheless, a recent executive get by President Joe Biden to assess the threats and advantages of the nascent industry may possibly deliver a considerably-needed framework for monetary institutions to follow.
Cowen believes that its more compact size enables it to adapt quicker than its much larger rivals to evolving crypto restrictions. “We have a major 1st-mover benefit in this space,” the bank’s co-president Dan Charney told Bloomberg in an job interview. “Mainly because of our tradition, we’re equipped to operate with our authorized and compliance and our regulators in a way that maybe our greater competition usually are not, and we are just in a position to get to methods more rapidly,” he added.
On March 9, President Biden signed a long-awaited govt order instructing federal agencies to review various impacts of cryptocurrency use. The purchase will process regulators with examining risks to buyers, investors, and the broader economic system.
