— Larry Cermak (@lawmaster) October 06, 2018
‘Global Trading Solutions’
According to the report, HSBC has brought on Bitfinex via a private account known as ‘Global Trading Solutions’. However, HSBC is yet to announce the existence of a formal partnership with Bitfinex. At present, EUR, JPY, and GBP deposits are paused at Bitfinex, but the situation is expected to be resolved within a week, as per Bitfinex’s website.
Why the confidence in Bitfinex by HSBC?
Being one of the oldest exchanges, Bitfinex has been through a load of challenges, especially considering the lack of transparency in cryptocurrency regulation in large markets such as the US, South Korea, and Japan. With there being an increasing rise in the demand for cryptocurrencies, HSBC seems to be taking a gamble by hoping that cryptocurrencies and blockchain technology will be here for the long term.
This is especially interesting considering that in 2017, Wells Fargo moved to drop the very same exchange, something that was considered a big blow in Bitfinex’s quest for legitimacy. By partnering with a well-established banking giant, Bitfinex will have accrued one of the largest partnerships in the cryptocurrency space as a whole. If this deal between the two firms can be sustained for the long term, Bitfinex will successfully establish themselves as a legitimate exchange to institutional investors.
Nature of the relationship still unclear
While speaking to The Block, Rasper Ramusen, Bitfinex’s director of communications was tight lipped on the nature of partnership between HSBC and Bitfinex.
Traditional financial institutions seem to be warming up to the idea of cryptocurrency day by day. In fact, most exchanges in major markets like South Korea and Japan have been given the green light by large commercial banks and financial institutions to form partnerships within their respective countries. If Bitfinex secures the partnership with HSBC, it will undoubtedly have a positive impact in regards to the bearish nature of the cryptocurrency market in 2018, where price values of leading cryptocurrencies have fallen considerably in comparison to their 2017 levels.