FalconX Joins Lynq Network Launch as Institutional Interest in Digital Assets Grows

FalconX, a digital asset prime brokerage, has joined Crypto.com, Galaxy, Wintermute, and others as a launch partner for Lynq, a platform designed to serve as a settlement layer for digital asset and financial institutions. This partnership underscores the growing institutional interest in digital assets as regulatory clarity improves. FalconX, which has access to over 400 tokens, will act as both a participant and a liquidity provider on the Lynq network, according to Lynq CEO Jerald David.

Lynq, developed in partnership with Arca Labs, Tassat Group, and tZERO Group, aims to address evolving regulatory frameworks and counterparty risk. These issues are crucial for institutions that adhere to strict regulations and are looking to launch crypto products. In the crypto world, settlement is the final step in the process where funds are transferred between parties, and the transaction is recorded on the blockchain. Examples of settlement processes include sending tokens from one party to another, releasing collateral stored in a contract, and token generation events where tokens are automatically distributed to investors.

Other notable players in the institutional settlement network space include Anchorage Digital, which has an institutional settlement network called Atlas, and BVNK, a crypto company based in London, involved in various crypto settlement processes. Additionally, blockchain-based settlement networks like Kinexys by J.P. Morgan and the “Project Ion” platform by a major US equities clearinghouse are also in operation.

David highlighted that access to the Lynq Network is available at no cost to participants, and transactions on the network are not subject to transaction fees. Lynq’s revenue is derived by taking a small portion of interest from the portfolio. The platform is set to begin its final user acceptance testing phase on Friday.

The impending launch of Lynq may signal growing interest among institutions toward digital assets, particularly for stablecoins, which are becoming more widely used in settlement processes. Stablecoins offer several benefits over traditional fiat currency, including reduced transaction costs, faster settlement times, and improved liquidity. These advantages are amplified in cross-border transactions or in countries where reserve fiat currencies, such as the US dollar, are held in low supply. According to a Fireblocks survey, 90% of institutions are using or have plans in the works to use stablecoins. In May, several large US banks were in early talks to issue a joint stablecoin.