Peer-to-Peer Competition Grows with Loop FX Launch

31/10/2022

The FX industry will have another new trading venue in the peer-to-peer (P2P) space with the launch (in pilot phase) in December of Loop FX, a venue aiming to match off large buy side spot FX trades with bank interest.

Although interest in P2P trading has undoubtedly grown in recent years, sceptics have argued that in its purest form, the model breaks down whenever there is a directional move in markets, because it is then that bank risk warehousing provides value. Loop FX is apparently trying to divert this criticism by including the banks in the process, allowing them to stream axes and other interest above the $10 million threshold the new venue has established.

Matches will execute at an independent market mid-rate, with matches executed with other buy side firms as well as, if no match is available, with banks. The firm says LoopFX has been built upon open architecture and will integrate into current workflows on existing trading platforms, with minimal changes to legal documentation.