Investors of all backgrounds view crypto as a rising asset class. And there’s a new type of entrant that’s been eyeing crypto as a potent investment as of late: corporations.
Corporations don’t behave like retail investors. With their high trading volume and steep internal bureaucratic policies, they need to behave differently to ensure they don’t break the market—and one way they can preserve ideal market conditions is by engaging in OTC trading.
Let’s talk about it.
What is OTC Trading?
Over-the-counter (OTC) trading refers to the direct buying and selling of crypto assets between two parties outside of a public exchange.
Rather than placing an order on an exchange platform, OTC trades take place on a specialised OTC desks. The trade executes at prevailing market prices, while the crypto is liquidated privately.
It’s important to note that OTC desks aren’t separate entities from crypto platforms. For example, Independent Reserve’s OTC trading desk exists to serve corporations, and it also has its own exchange service for retail buyers.
But with OTC trading, larger volumes of crypto can move without making big splashes in the market, allowing corporate treasuries to trade large volumes of crypto and stablecoins without disrupting the market.
How Do Corporations Start an OTC Trade Agreement?
Corporations can get started with over-the-counter desk trading without much difficulty. Here’s how to start.
First, they must choose a reputable OTC desk or broker. Many OTC desks can be found online. They also typically require a minimum order size before businesses can move forward with the OTC trade agreement.
If you meet their requirements, register with them, complete compliance checks, submit required documentation, and define custody and settlement procedures with them.
Once you’ve established this partnership, you (representing the corporation) can send the desk the asset pair you’re willing to buy or sell. You should also send your preferred settlement window. The desk will then return a quote and a validity period, as well as any pertinent fees.
If you agree with the terms, you can accept the quote, and the desk will issue a trade confirmation. Then, you should send fiat or crypto to the desk as agreed upon. The desk will then deliver the crypto to your designated wallet.
Following this transaction, match the trade confirmation to bank statements and record the trade internally. Repeat the cycle as necessary.
3 Benefits of Corporate OTC Trading
Corporate OTC trading offers more than just a setup for large corporations to discreetly trade.
Here are three additional tangible benefits of OTC trading:
-
Reduced price slippage: Large orders are executed off-exchange, helping corporations avoid moving the market and getting worse rates.
-
Operational support: Dedicated account managers help coordinate settlement, reporting, and end-to-end execution for large transactions.
-
Stronger governance alignment: Reputable OTC desks use robust KYC and institutional processes that fit corporate compliance and internal controls.
Overall, OTC trading helps corporate buyers purchase or liquidate crypto. We hope we’ve helped you learn how OTC trading streamlines corporate purchases!