- Croatia-based ElectroCoin partners with Swiss-based FinchTrade to enhance post-trade settlement processes for crypto-to-fiat exchanges.
- FinchTrade absorbs interim exposure in crypto-to-fiat trades, removing market risks from ElectroCoin due to crypto volatility.
ElectroCoin, a Croatia-based crypto exchange and payment processor, has partnered with FinchTrade, a Switzerland-based institutional OTC (Over-the-Counter) desk for crypto platforms. The link-up aims to eliminate price exposure between the time a client confirms a rate and the time of settlement in crypto-fiat transactions.
The FinchTrade And ElectroCoin Partnership
According to the parties’ press release, the move aims to address systemic risk in retail crypto-to-fiat transactions. It basically fixes the timing problem upon the execution of a transaction to its actual settlement.
Under the partnership, ElectroCoin processes trades using FinchTrade’s API (Application Programming Interface) at roughly every 10 minutes, with net settlement occurring two to three times a day. It covers exchanges ranging from €10 up to several hundred thousand euros.
What the Collaboration Unlocks
Previously, ElectroCoin relied on centralized exchanges for liquidity. However, the model exposed the platform’s transactions to price fluctuations in crypto-to-fiat currency conversions.
Typically, the design required the underlying crypto asset to arrive first in a transaction. The delay between the user confirming the transfer, the asset’s movement, and the eventual settlement created a window of volatility. Hence, even a few minutes between these processes can amplify ElectroCoin’s market risk if the price of the crypto asset suddenly falls during transit and before settlement.
The collaboration passes the interim exposure to FinchTrade. Meanwhile, it removes rate uncertainty in ElectroCoin’s fixed euro rate service.
Additionally, FinchTrade extends the same support to ElectroCoin’s merchant clients. The same mechanics remove the need for merchants to manage crypto exposure themselves.
As a result, it ensures that e-commerce businesses and point-of-sale vendors receive the exact euro amount locked in at the moment of the customer’s purchase, even in times of heightened volatility in crypto prices.
Regulatory Compliance of the Partners
FinchTrade is a registered OTC liquidity provider for crypto in Switzerland. It operates in over 30 countries as a financial intermediary. The Financial Services Standards Association (VQF), an authorized Swiss self-regulatory body in Zug, supervises the platform.
On the other hand, the Croatian Financial Services Supervisory Agency (HANFA) regulates ElectroCoin as a crypto trading and management platform. It currently awaits approval of its MiCA (Markets in Crypto-Assets) operating license, which will allow it to expand its services across the Single Euro Payments Area (SEPA) region in the European Union.
