Canada’s leading stock exchange is diving into the wonderful and unpredictable world of cryptocurrency.
TMX, the exchange operator for the TSX and TSXV, has announced it is constructing a brokerage platform for cryptocurrency investors focused on bitcoin and ethereum. The new brokerage service will be formed through an agreement with the TMX-owned Shorcan Brokers and the Toronto-based Paycase Financial.
The brokerage will help to compile consolidated data on bitcoin and ethereum, then publish performance benchmarks such as indexes. This data will be drawn from leading cryptocurrency exchanges around the world, as well as over the counter brokered volume.
This new platform will be called Shorcan Digital Currency Network (DCN) and will premiere in the second quarter of 2018. The ventures initial goal is to reportedly capture two to five per cent of global over the counter trading. In total, anywhere from $4 billion to $10 billion worth of cryptocurrency exchanges hands every day.
“Shorcan DCN represents a significant step forward in the execution of TMX Group’s digital strategy,” said John Lee, managing director of enterprise innovation and product development at TMX Group. “As new technologies continue to reshape the global financial industry, we continue to explore new ways to evolve our business to address client needs in both traditional and non-traditional markets.”
BMO will help Shorcan DCN with certain banking services as part of the payment and settlement infrastructure.
This is a big push towards the legitimacy of cryptocurrency in Canada, as many of the big banks (including BMO, oddly enough) have started to shut down the purchase of digital currency with their branded credit and debit cards. TD and Scotiabank have also shut down cryptocurrency purchases.
In terms of more widespread adoption of cryptocurrency in Canada, the Canada Pension Plan Investment Board (CPPIB) addressed the possibility of including digital currency investments last year.
“The currencies themselves, I’d say it’s still early days to figure out whether this is truly institutionally investable and whether they really are liquid gold,” said Mark Machin head of the CPPIB. “It’s worth paying serious attention to it.”