Regulated Australian derivatives exchange market operator to launch institutional digital asset custody services underpinned by Tier 1 bank-grade technology
Mercari, which operates a licensed Australian Tier 1 wholesale financial derivatives exchange, has selected METACO, the market-leading provider of digital asset custody orchestration technology to complex, global financial institutions, to launch its institutional digital asset custody operations. Mercari is deploying its technology on IBM Cloud in order to leverage the confidential computing capabilities of IBM’s digital asset infrastructure.
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Mercari has been developing a growing suite of crypto asset investment services. In January, it launched the Mercari DAR Crypto Reference Rates, the first local and robust AUD crypto-asset benchmarks for the Australia and Asia markets.
To launch its institutional digital asset custody offering, Mercari will use METACO’s digital asset custody and orchestration platform, Harmonize, helping enable clients to securely store, trade, and settle digital assets. Harmonize was built in partnership with Tier 1 banks and offers the highest standards of security and compliance for Mercari to operate in the digital assets sector. This foundational infrastructure provides Mercari with the option to further expand its digital asset offering in the future, in a highly-scalable and efficient manner.
Mercari will deploy Harmonize, which is supported by IBM Cloud Hyper Protect Services1. This setup will allow Mercari to scale to millions of wallets, while maintaining control over private keys for risk management and ensuring that keys are securely stored on local infrastructure in Australia. IBM’s Digital Asset Infrastructure is designed to help custodians achieve greater results when using METACO’s Harmonize platform, including enhanced scalability, security, and compliance.
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IBM Cloud Hyper Protect Crypto Services is designed to enable METACO Vaults to store encrypted keys externally in a database while affording the protections of IBM’s FIPS 140-2 Level 4 rated hardware security modules (HSM). With external storage of keys enabled by IBM’s master encryption key technology, custodians can scale to billions of wallets. The sensitive processing on METACO Harmonize is secured by IBM Cloud Hyper Protect Virtual Servers hardware-based, Common Criteria-certified isolation. IBM Cloud Hyper Protect Secure Build Server is designed to reduce risks of malicious code insertion during Harmonize deployments and address unauthorized rule manipulation by working to make policies on the platform tamper proof. Irrespective of how Harmonize is consumed, custodians retain physical control of the root of trust of the assets and the policies that govern management of the assets, through the IBM HSM Smartcards.
Patrick Enjalbal, Managing Director APAC at METACO, commented: “Australia is a growing hub for digital assets in APAC with the Australian Prudential Regulation Authority (APRA) recently setting out a crypto policy roadmap on the asset class. We’re proud to partner with Mercari, a regulated and innovative exchange, to support engagement with the asset class in Australia. Our platform, Harmonize, provides institutional grade security and governance for the custody of crypto assets, while ensuring the requisite flexibility and agility for innovators like Mercari to go- to-market and scale quickly.”
Licensed as an electronic derivatives exchange since 2005 Mercari has been a leading innovator in the development of financial market infrastructure for wholesale derivatives markets and was the first licensed electronic swaps marketplace to operate in Australia.
Brian Price, director of Mercari commented: “As a leading regulated derivatives marketplace we recognise that when the legislative frameworks both in Australia and internationally are ultimately settled there will be a requirement for new and structurally appropriate institutional product solutions for the crypto class of assets.”
Price added:
“Our work with strategic partners such as Metaco and IBM Cloud will help ensure that Mercari maintains a standard of excellence commensurate with the most stringent of true institutional use case expectations. We are anticipating that without ultra-high grade domestic institutional digital asset custody the industry will struggle to attract wide based internal compliance and regulatory support.”
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