Globitex digital currency exchange to become global trading venue

Who better than a group of experienced traders with strong knowledge of cryptocurrency to create a digital currency exchange that will allow everyone to trade commodities and money market instruments for Bitcoin?

That’s the background of the Globitex team, cofounder Liza Aizupiete said. Currently, in beta, Globitex is preparing for its ICO, which is organized in order to scale the existing Globitex exchange infrastructure to the necessary industrial trading level, with a capacity to accommodate standardized money markets and commodities listings.

“All of our team are basically traders,” Ms. Aizupiete began.

Each team member had several years of trading experience before Bitcoin’s debut, and since then they followed developments closely.  Following Mt. Gox’s collapse in 2014, the original members saw an opportunity, especially for an exchange whose technology carefully addresses every aspect of development.

Liza Aizupiete

Start with reporting, a simple yet crucial aspect of trading, Ms. Aizupiete said. Accountants and traders often have problems locating specific orders, but Globitex allows all participants to easily locate specific trades with a special marking feature.

There is an even more important factor, Ms. Aizupiete explained.

“In order to provide orderly access to the market, we are always of the opinion we needed regulatory approval. Since 2014 our approach was a regulator’s license is needed.

“Back then no one even thought of this.”

On Nov. 23 Globitex group company NexPay UAB received its e-money license from the Bank of Lithuania to deliver payment services and e-money issuance in the European Union.

The move is an important step for Globitex as it seeks to increase bitcoin trading volumes in order to facilitate its use across all commodity and money markets. It brings many advantages, including the possibility of direct integration to the SEPA euro payments system. NexPay can directly clear euro payments without commercial bank involvement and issue IBAn accounts to Globitex clients just as banks issue accounts to theirs.

The license is fully passportable to all EU member states, meaning NexPay can now offer clients payment services and e-money issuance across all 28 countries.

“I look forward to this evolution of digital currency trading platforms that ensure futures contracts with a physical delivery component,” Globitex chairman and Bitcoin Foundation founding director Jon Matonis said. “Strong connection to the spot markets, including contract limits and physical delivery that is linked to provisioned commodities, will serve as the market standard for price integrity.”

Try Globitex Exchange here

“This will set us apart,” Ms. Aizupiete added. “This is much more potent, something that offers the ability to be almost like a bank when it comes to SEPA (Single Euro Payments Area) transfers.”

Globitex has also used the FIX API, the most convenient and widely accepted protocol in the financial industry, Ms. Aizupiete said. A communication protocol facilitating the exchange of financial information, the FIX API offers superior speed and access.

“On the level of matching, connectivity and regulatory reporting, Globitex is definitely a superior product,” Ms. Aizupiete said.

Globitex has a three-stage business development plan, Ms. Aizupiete explained.

The first involves a scale spot foreign exchange where Bitcoin can be traded against both other major cryptocurrencies and fiat currencies. The key activity at this stage is the establishment of relationships with more bank partners around the world and across the currency spectrum. Thorough security and business evaluations will occur and will include the development of payment system extensions with the highest security standards before other cryptocurrencies will be accepted as trading instruments.

Globitex clients will be able to lend to each other via standardized maturities repurchase agreements (REPO), Ms. Aizupiete said. This will facilitate leveraged trading, with the loans made available as collateralized debt instruments that can be used outside Globitex. The result is the establishment of a cryptocurrency money market with market-based interest rates.

Expect commodities trading in bitcoin too, Ms. Aizupiete said. Beginning with deliverable spot gold, Globitex will develop order book and distribution channels for gold bought against bitcoin.

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Stage two is highlighted by the debut of BIBOR, aka the Bitcoin Inter-Broker Offered Rate, Ms. Aizupiete said. Globitex will aggregate the leading Bitcoin margin lending market interest rates, including its own, to produce a tradable interest rate product. This will set the standard reference rate for the Bitcoin capital markets. IT infrastructure and risk management will allow Globitex to accommodate options listings in commodities, FX and money markets, thereby linking Bitcoin to global trade at all derivative levels.

The final stage sees the advent of a Bitcoin-priced Globitex commodity index. Different commodity groups will be aggregated as cash-settled futures in a Bitcoin-priced index which will have a specific weight for each commodity group. While its initial purpose will be to serve as a reference price, it could develop into a tradable index futures product.

Taken together, the goal of these stages is to improve Bitcoin’s ability to function as a legitimate currency, Ms. Aizupiete explained.

“What any currency needs are direct pricing with real things – coffee, orange juice, chocolate. All of these commodities are traded, imported and exported in bulk and paid for in specific currencies.”

Most demand for currency is from produced products and services and if conditions are amenable to large trades, there will be a resultant demand for the currencies traders wish to exchange in.

“Bitcoin is not nearly where it should be in terms of capability,” Ms. Aizupiete said. “Globitex will create demand for Bitcoin and show it can be used for so much more.”


Update: E-money license granted

Globitex’s path to making bitcoin a truly global settlement currency got much clearer Nov. 23 after Globitex Holding’s Latvia-based group company NexPay UAC was granted an e-money license by the Bank of Lithuania to deliver payment services and e-money issuance in the European Union.

The move is an important step for Globitex as it seeks to increase bitcoin trading volumes in order to facilitate its use across all commodity and money markets. It brings many advantages, including the possibility of direct integration to the SEPA euro payments system. NexPay can directly clear euro payments without commercial bank involvement and issue IBAn accounts to Globitex clients just as banks issue accounts to theirs.

The license is fully passportable to all EU member states, meaning NexPay can now offer clients payment services and e-money issuance across all 28 countries.

“I look forward to this evolution of digital currency trading platforms that ensure futures contracts with a physical delivery component,” Globitex chairman and Bitcoin Foundation founding director Jon Matonis said. “Strong connection to the spot markets, including contract limits and physical delivery that is linked to provisioned commodities, will serve as the market standard for price integrity.”

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