Blockchain CEO Peter Smith.
Krisztian Bocsi | Bloomberg via Getty Images
Blockchain, one of the world’s largest cryptocurrency wallet platforms, says it’s launched a digital currency exchange aimed at delivering “lightning-fast” trades.
The company’s exchange, called The PIT, is the result of a behind-the-scenes effort led by a team of former executives from the New York Stock Exchange, TD Ameritrade, Google and Goldman Sachs.
According to Blockchain CEO Peter Smith, the new exchange’s matching engine Mercury can execute buy or sell orders in “40 to 50 microseconds,” an “order of magnitude faster than other market players” like Coinbase and Binance.
Founded in 2011, Blockchain initially started out with what’s known as a block explorer — kind of like an internet browser for cryptocurrency data — and then built digital wallets for users to store and exchange their crypto. It derives its name from the eponymous blockchain network that records bitcoin transactions.
Having enjoyed popularity with bitcoin enthusiasts — Blockchain claims to account for about 25% of daily activity on the bitcoin network — the company is hoping its exchange platform will help lure in the uninitiated.
“There’s a huge audience of people who have not yet placed their first bitcoin trade,” Nicole Sherrod, head of trading products at Blockchain, told CNBC in an interview. Sherrod previously led the active trading product team at online stock broker TD Ameritrade before joining Blockchain.
Sherrod said the new trading platform would give investors a degree of liquidity not seen in competitor exchanges.
“In volatile markets in particular, speed is of utmost importance,” she said. “I would not feel comfortable delivering a platform to retail investors that puts them in a position where they couldn’t get in and out of a trade with lightning-fast speed.”
Blockchain CEO Peter Smith says the cryptocurrency firm’s new exchange can executive order in a matter of “microseconds.”
Cryptocurrencies have gained a reputation for their volatile price swings. Bitcoin in late 2017 skyrocketed to a near-$20,000 record high, before plummeting the following year to as low as $3,122. The world’s best-known digital currency has been on the rise this year, however, last trading at $9,502.
Bitcoin’s rise in 2019 was attributed in part to Facebook’s plans to create a cryptocurrency, with analysts saying it brings some much-needed credibility to cryptocurrencies. Facebook’s Libra project has been panned by regulators, however, concerned by the risks it may pose to consumers.
One big hurdle for the industry to overcome is bringing institutional investors with deep pockets on board. That may be slowly starting to happen, with financial services giant Fidelity signaling it’s warming to the space. Sherrod said that Blockchain’s crypto exchange is providing liquidity through “institutional-level market makers.”
Blockchain said its exchange will be available in more than 200 countries, starting with 26 trading pairs. Users will be able to link their bank account with Blockchain and use U.S. dollars, euros and sterling to trade cryptocurrencies.
The company has raised over $70 million from investors including British billionaire Richard Branson, Alphabet venture arm GV and early Spotify backer Lakestar. It has also accrued over 40 million users, Blockchain said, who will be able to transfer crypto from their wallets to the exchange.