London-based investment platform IG Group (IGG) announced that it has taken a significant step in the cryptocurrency market, becoming the first publicly traded company in the UK to offer spot cryptocurrency trading to individual investors. Until now, the company has only offered access to crypto assets through derivatives. This move enables it to expand its crypto reach with direct spot market trading for the first time.
IGG to launch spot cryptocurrency trading
IG Group has become the first publicly listed company in the UK to offer spot cryptocurrency trading to individual investors. While some platforms have previously offered crypto services in the UK, they were either private companies or only offered derivatives (such as CFDs). The difference with IG's move is that it is both a publicly traded firm and it is launching direct spot trading, where traders can actually own BTC or ETH.
Under the new service, traders will be able to conduct spot trades on Bitcoin (BTC), Ethereum (ETH) and various smaller tokens. The company has partnered with Uphold, a US-based crypto-focused fintech company, to offer this new service. Thus, crypto trading has been integrated into IG's platforms, where stocks, foreign exchange, commodities and derivatives are already traded.
Previously, IG's access to the cryptocurrency market was limited to derivative instruments such as contracts for difference (CFDs). However, spot market trading, where users can directly own assets, significantly expands the range of services in this area. Following this development, IG Group shares rose by around 0.25% in intraday trading, with the FTSE 100 index flat.
Nevertheless, IG's move raises some question marks. Traders will have to ride out price fluctuations without leverage on the service. They will also bear the full tax burden on the gains and deposit protection insurance will not apply. The FCA is also still setting capital adequacy and asset security criteria for firms holding client crypto. This means that some changes to the compliance process may be required in the future.
On the other hand, crypto markets remain buoyant in parallel with IG's product launch. As of June 2, the total market capitalization has reached nearly $3.3 trillion and the price of Bitcoin remains stable at around $105,000.
Legal framework for cryptos on the agenda in the UK
Meanwhile, cryptocurrencies and especially stablecoins remain on the agenda in the UK. In the country, draft laws covering crypto trading and stablecoin issuance activities were opened for discussion, with two separate public consultation documents published in April.
