TP ICAP will restructure its institutional crypto venue, Fusion Digital Assets, to operate under a matched principal model from March 2026. Under the new setup, TP ICAP will stand between buyer and seller in each transaction, acting as counterparty to both sides while offsetting the trade at the same time.
Clients will no longer trade directly with one another. Instead, they will face TP ICAP, with transactions settling off-exchange and without the need for pre-funded accounts. The setup mirrors the firm’s established model in foreign exchange swaps, interest rate derivatives and credit markets, where it intermediates between large institutions without taking directional market risk.
Fusion moves away from the agency-style structure
Fusion launched in 2022 as an agency-style institutional spot crypto venue with segregated custody and third-party post-trade settlement. Early participants included Fidelity Digital Assets, Jane Street and Flow Traders, showing TP ICAP’s effort to build a wholesale-oriented alternative to retail-led exchanges.
In an agency market, counterparties face each other directly. That often requires bilateral credit lines or pre-funded balances, both of which tie up capital and add counterparty exposure. Those concerns became sharper after the November 2022 collapse of FTX, when institutional risk teams revisited exchange-based models built around commingled custody and unsecured creditor arrangements.
With matched principal trading, exposure shifts to a single intermediary. Clients trade against TP ICAP, which offsets the transaction and manages settlement. That reduces the need to park cash in advance and concentrates credit exposure with a regulated broker rather than across multiple crypto-native venues.
Regulatory pressure is part of the backdrop
TP ICAP operates under UK regulatory oversight and holds an investment-grade credit profile. In traditional markets, the firm already handles large notional volumes across rates, FX and credit products. Extending the same structure into crypto relies on infrastructure it already maintains, including capital buffers and credit risk systems.
The timing also lines up with tighter digital asset regulation in Europe and the UK. The EU’s Markets in Crypto-Assets framework is being rolled out through 2025 and 2026, while UK authorities are widening oversight of digital asset activity. Basel Committee guidance on bank exposure to cryptoassets has also clarified capital treatment, pushing institutions to manage digital asset risk within existing control frameworks.
Simon Forster, managing director and global co-head of digital assets at TP ICAP, said the matched principal structure reflects a model already familiar to institutional clients and offers an alternative to exchange-style crypto trading.
Longer trading hours and a broader product set
Capital efficiency remains central for banks, hedge funds and asset managers. Pre-funded exchange accounts fragment liquidity and create extra operational work. Bilateral exposure across several venues also raises monitoring needs and makes collateral management harder. Fusion’s new structure replaces cash pre-positioning with credit intermediation, bringing crypto spot trading closer to OTC FX and rates market practice.
TP ICAP also plans to extend Fusion’s operating hours from 23/5 to 24/5, with weekend coverage under consideration. The firm said it may expand the product range to include additional major cryptoassets, stablecoins, new fiat pairs and tokenised real-world assets. Whether clients adopt the model at scale will depend on balance sheet economics and counterparty appetite.