Settings standards for crypto trading
After a relatively long vacation, the FIX Community Blockchain and Cryptocurrencies working group resumed its work. I strongly believe that this is a good sign and indication of interest from the “big guys”.
Main discussion topic was how to classify cryptocurrencies and tokens. It might sound strange for people outside of the financial world but here is the thing — FIX, as a standard, is built on top of other standards like ISO 4217 (currency codes) or ISO 10383 (market identification codes) and the International Organization for Standardization (ISO) has some concerns about including cryptocurrencies. Currently, currencies are coded using two letters that identify country (Alpha 2 spec) and one letter for a local monetary unit — United States Dollar, RUssian Ruble. BT(for Bitcoin) is already taken for Bhutan and ET(for Etherium) belongs to Ethiopia.
The variety of tokens causes even wider problems besides naming conventions. As long ISO 4214 clearly stated that length of the currency code is 3 symbols, all banking, airline, train and who knows what other systems are built with this assumption in mind. Three letters. Period. Most of the tokens are using four or even more letters. There is no common standard or even widely adopted agreement — that’s why we have AE, ELF, XTRD, ETHOS or CTIC3 (names chosen almost randomly).
So what’s the problem, why not just add one or two extra characters into a database? Well, it will cost a lot. A LOT. Things are even more complicated with hardware — there is no space or physical capability to expand.
Despite the serious obstacles, many financial organizations are seriously looking for ways to add crypto into their portfolios. The FIX Trading Community has a strong influence on ISO so sooner or later the solution will be found. One possible solution — there is an entire family of X currencies/instruments (e.g. gold among them — XAU) that might be extended somehow. Anyway, time will tell.
Another interesting topic of discussion was the upcoming new FIX spec for crypto. It’s supposed to be released by the end of this year but we will have a draft much sooner.
As long XTRD is moving to the space of providing FIX connectivity for exchanges, our commitment might be valuable enough because we have hands-on experience and influence.
Small self-promotional section — with more than twenty-five participants on a call, the most active were CME Group, two other companies I can’t remember, and… XTRD.
