stock exchanges separate (and occasionally reacquire for commercial reasons) trading from custodian services. I'm not at all up to date but I long ago presumed

stock exchanges separate (and occasionally reacquire for commercial reasons) trading from custodian services. I'm not at all up to date but I long ago presumed bitcoin needed to move to a custody transfer market instead of processing on the block chain and the expense involved or beholden attachment that creates to a miner. if Citi (eg) will lend me to trade against collateral of my existing holdings finding risk less (cp counterparty and ops*) liquidity from stock borrowers (typically short players) and happily create a new income that's limited by the value at risk of my trading up to my collateral underlying assets and therefore greater than the principal, surely so can Coinbase. I assumed that was why the London Stock Exchange invested in them. edit I forgot *: see Herstatt Risk inherent in closing currency cash dealing causing the eponymous bank's failure in 1974. possibly more interesting to today was a year earlier in the Cedar Bank crisis in '73 that although little known was the most existential threat to the markets certainly pre LTCM and I'd say still far more dangerous. relevant today because Cedar was a pseudo official shadow bank living by profits from high risk secondary mortgage loans. Cedar was only a bank under a statutory loophole the infamous (to my career at least) Section 123 of the English banking act. interestingly none of the UK so called challenger banks are clearing banks the only new one in 400 years is a white label specialist running on Azure called Clear.bank at that url. a notable lot of UK transactions are happening on Azure with Clear.