South African cryptocurrency exchange and prime broker, OVEX, has obtained a forex trading license and added a full-service forex desk to its crypto offering, which now includes more than 50 crypto and stablecoin pairs.
This is because one of the issues that crypto traders face when trying to use their foreign currency allocation for crypto trading is banking institutions’ ambivalence. While several banks have opted to stay away from cryptos due to the reputational dangers that this new asset class poses, Ovex believes that this is a decision that will inevitably be reversed as clients want access to cryptos in the not-too-distant future.
The ‘white glove’ forex service, according to OVEX CEO Jon Ovadia, currently has minimum trade size of R200 000 and is aimed at anyone looking to buy or sell fiat money, whether for crypto or other types of international trade.
“What we bring to the forex space that is unique is a truly white-glove service. We use WhatsApp to communicate with clients and keep them up to date with the latest forex rates. Clients can lock in a rate that meets their requirements by messaging us on WhatsApp.” He says.
“All this can be done in seconds. Plus our forex rates are about half the going market rate. We allocate a relationship manager to each of our clients so they have someone who not only knows and understands the forex market but is going to take responsibility for the management of that account. Client queries can be handled almost instantly. You don’t have to log a query with a faceless representative and then wait days for someone to get back to you. That’s the market we set out to disrupt.”
The OVEX FX service allows any individual or business to buy or sell fiat currency above the minimum threshold of R200 000.
The currencies offered include US dollars (USD), euros (EUR), British pounds (GBP), Swiss francs (CHF), and Japanese yen (JPY), to name a few. OVEX has partnered with many of South Africa’s leading banking institutions and offers the best spreads in the market.
All payments go through a registered authorized dealer and normal capital laws and limits apply.
The OVEX FX service, according to Ovadia, complements the company’s crypto OTC and prime brokerage business, which has a constant customer base comprising institutions, family offices, and high-net-worth individuals. According to Ovadia, the business is upsetting the forex market in a variety of ways.
“Firstly, clients – whether retail or corporate – feel that South African financial institutions are doing them a favor by purchasing forex for them. That comes from a mindset ingrained through decades of exchange control. And with that attitude comes the high costs of purchasing forex. These costs make no sense, and we see this as a market begging for disruption. We can offer forex to importers, exporters, retail and corporate clients, as well as crypto traders.”
“We can offer retail clients rates as low as 0.3%, which is up to a third of the price many others are charging, and we can go even lower for corporate and high-net-worth clients with large forex orders. Being able to seamlessly trade forex and cryptocurrency all under one roof is a big deal. We are able to offer lower rates than anyone else at lightning speed because of our deep liquidity and proprietary trading technology that we developed originally for the crypto market, and then transitioned to the forex market.” Ovadia adds
As regulators and cryptocurrency market-makers, such as OVEX, construct a regulatory climate favorable to even the most vanilla wealth managers, banks and traditional investors are becoming more interested in the crypto market.