This is a sponsored guide and does not represent investment advice from CryptoCompare. Please do your due diligence when dealing with any Initial Coin Offering and never invest more than what you can afford to lose.
Cryptocurrencies are becoming more and more popular as an alternative investment vehicle thanks to their rising value, safe-haven asset properties, low-entry barrier, and their overall ethos of decentralization and transparency. However, banks and licensed brokers cannot fully operate with cryptocurrencies until they are legalized. Major exchanges are still not regulated (excluding a few like Gemini and Bitstamp) and those that are regulated by the law of Japan, only offer few pairs for trading.
Lack of liquidity is also a big issue. Liquidity is the permanent volume for the purchase or sale of an asset at any time, and the broker has to collect liquidity from many crypto exchanges and other counterparties. For each of them, a contract and a deposit are required — this is inconvenient and requires constant monitoring and monetary costs.
Integration with crypto-exchanges and other counterparties also entails technical difficulties because each exchange has its own systems and API. Brokerage companies also need software that allows them to connect to different providers, aggregate them and convert them into a single international standardized protocol format.
What is B2BX
B2BX is a cryptocurrency liquidity aggregator for margin and exchange trading while also providing distribution of liquidity to broker companies. B2BX will focus exclusively on institutional clients: crypto exchange, brokers, FOREX brokers, DMA brokers, cryptocurrency brokers, hedge funds and other professional market participants.
Regarding the absence of market regulations, the B2BX whitepaper reads:
“Exchange trade with physical delivery on the basis of the Japanese company with the license JFSA, margin - based on CySec, ASIC, FCA. The number of the company's licenses will depend on the success of the crowdfunding campaign”
How does it work?
The B2BX aggregator will work in three directions:
Physical delivery exchange - Trade will be carried out on the basis of the company with the Japanese license JFSA.
Marginal trading - B2BX is using a company with a Vanuatu license (VFSC) for the aggregation and distribution of liquidity. To connect the aggregator to large financial institutions in different jurisdictions, B2BX plans to obtain the following licenses: CySEC (Cyprus), FCA (UK) and ASIC (Australia). Marginal cryptocurrency liquidity will be distributed through brokers with a license.
Exchange cryptocurrency for another cryptocurrency - All B2BX members (exchanges, brokers, financial institutes) will be controlled by a financial regulator and will need to meet all requirements and standards that are designated by the state.
The integration of B2BX with the largest trading platforms, aggregators, stock exchanges, and financial institutions on one site will provide a deep understanding of prices for cryptocurrencies. B2BX will also aggregate and convert protocols from different exchanges and providers, giving them to the broker through a single protocol based on the FIX API standard. With B2BX, a broker or any financial institution signs one contract and receives a single margin account and 3 types of liquidity: Forex/Spot, DMA Stock market, and crypto-liquidity.
The product is ready and it is in its alpha stage. B2BX will use SoftFX aggregator as a basic solution since it is already integrated with the 5 major crypto-exchanges and the project already has 12 institutional clients for this product. The project uses the FIX API protocol for further distribution of liquidity to other systems and aggregators.
B2BX will also be integrated with all other Prime Brokers, Liquidity Providers, Banks, Hedge Funds and top-end cryptocurrency exchanges, to get the full depth of the market for cryptocurrencies.
B2BX Token & Initial Coin Offering
From October the 2nd to November the 17th there will be an ICO to raise funds for the development of the B2BX aggregator. The implementation of the ICO will contribute to the development of the technical base of B2BX and significantly increase the scale of work with the cryptocurrencies and the speed of developing its own software.
During the pre-ICO, the company managed to raise more than €1,000,000, which is a very good result, but the bigger amount is expected on the main stage of the ICO.
More information concerning B2BX token distribution can be found here.
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