ClearToken says it has identified a missing piece in the digital asset market structure and is taking this on by building a central counterparty.

The CCP will remove bilateral counterparty risk for settlement, financing and derivative transactions by centralising clearing, settlement, collateral and risk management arrangements, akin to traditional exchange traded assets.

This will enable all participants in the ecosystem - investors, exchanges, brokers, market makers and custodians - to face the CCP rather than each other, thereby streamlining transactions, increasing capital efficiency and reducing risk for all participants.

ClearToken’s CCP is not native to any individual exchange or platform and can act to clear bilaterally-agreed transactions over-the-counter.

The UK-headquartered outfit says it is working with regulators globally to develop rules to which it will comply, in order to stabilise the current ecosystem and safeguard participants.

The venture is being incubated by Laser Digital, The Swiss-based independent digital asset company set up by Nomura last year to focus on areas such as DeFi, centralized finance, web3, and blockchain infrastructure.

Ben Stephens, CEO, ClearToken, says: "It is our ambition that this solution will mature the market to its next stage. We are already in progressed discussions with a number of key market participants who are fully supportive of our initiative.

"With Laser Digital’s support, ClearToken has the confidence to take its next steps as an industry-leading team with significant experience and expertise."

Jez Mohideen, CEO, Laser Digital, who is joining the ClearToken board, adds: "ClearToken’s initiative has the capacity to remodel a marketplace fraught with bilateral risk, transforming this market as we know it. We’re proud to be an investor and early supporter of this very necessary innovation."