Cowen (COWN) has established a digital asset unit.
The bank intends to provide crypto derivatives, loans, DeFi, and NFTs in the future.
Cowen Inc. (COWN), a full-service investment bank in the United States, stated on March 23 that it has formed a dedicated digital asset business, making it the latest Wall Street bank to enter the booming cryptocurrency industry.
IMPORTANT TAKEAWAYS
Cowen Digital is a new digital asset subsidiary founded by Cowen.
The unit will provide institutional clients with trading in established cryptocurrencies as well as custody services.
Cowen intends to expand into crypto derivatives, lending, DeFi, and NFTs in the future.
Cowen claims that its tiny size allows it to swiftly respond to changing crypto rules.
Cowen Digital, the new subsidiary, will allow the bank's institutional investors to trade known cryptocurrencies including as Bitcoin, Ethereum, and Solana. Through Standard Custody & Trust Co., it will also provide a custody solution for digital assets.
"Through Cowen Digital, our customers now have access to the crypto and digital asset markets with our institutional grade and fully integrated end-to-end execution and custody capabilities," Cowen's chair and CEO, Jeffrey Solomon, said in a statement. "Cowen is committed to outperforming for its clients by remaining at the cutting edge of innovation," he said.
According to the statement, the bank has spent 15 months creating the required systems and infrastructure to start the business.
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Cowen Digital, helmed by the bank's former equity derivatives head Dan Forman,
expects to expand its initial employment from roughly 40 to more than 100 staff members in the near term, with ambitions to expand into crypto derivatives, lending, decentralized finance (DeFi), and non-fungible tokens (NFTs).
The news comes only a month after JPMorgan Chase & Co. (JPM) made its first foray into the metaverse by launching a lounge in the blockchain-based virtual world of Decentraland. Customers may buy virtual pieces of land with NFTs and other services with cryptocurrencies in the lounge. 2 More recently, The Goldman Sachs Group, Inc. (GS) of New York extended its drive into cryptocurrencies by completing the first over-the-counter (OTC) crypto options trading enabled by digital asset investment business Galaxy Digital—the first transaction of its sort by a major Wall Street bank.
Advantage in Regulatory Terms
Lack of regulatory certainty surrounding cryptocurrencies has slowed Wall Street institutions' use of digital currency. However, President Joe Biden's recent executive order to analyze the risks and rewards of the emerging business may give a much-needed structure for financial institutions to follow.
Cowen claims that its diminutive size allows it to respond to changing crypto rules faster than larger competitors. "We have a significant first-mover advantage in this sector," said the bank's co-president Dan Charney in an interview with Bloomberg. 5 "Because of our culture, we're able to collaborate with our legal, compliance, and regulators in ways that perhaps our larger rivals aren't, and we're just able to get to solutions faster," he said.
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