How CASPs Can Transform Fragmented Systems and Architecture Into Scalable Compliant Operations
As institutional demand for digital assets continues to rise, so does the scale and complexity of the infrastructure needed to support them. Institutions seeking to join this evolving market are encountering a fragmented and often cumbersome landscape—one that requires piecing together multiple systems for custody, execution, settlement, risk, and compliance. This siloed approach leads to operational inefficiencies, as well as exposing institutions to greater risks and higher compliance costs.
To compete effectively and operate at scale, institutions need more than just point solutions – they need a fully integrated, automated infrastructure that can serve as a unified foundation for the digital asset lifecycle. The convergence of integration and automation is not simply a matter of convenience; it is rapidly becoming the new baseline for institutional-grade digital asset operations.
Fragmentation – a multi-pronged problem
Today’s digital asset market infrastructure has evolved quickly but not always cohesively. Liquidity is often the first topic raised when discussing fragmentation in digital asset markets, as it is dispersed across hundreds of large and small trading venues, making it a challenge for even large institutions to gain broad access to any given asset.
Besides fragmentation in liquidity, institutions are also often forced to work around a patchwork of systems – each with its own interfaces, data formats, and compliance requirements. Custody platforms operate independently of trading venues, which in turn may not be in sync with settlement engines or internal risk systems.
Regulations such as the EU’s MiCA framework have brought much-needed clarity to the markets, but they also introduce the need for policies and processes around areas such as best execution and cyber-resilience, necessitating redundancy and further complexity.
The result is a disconnected architecture that increases operational overhead, impedes scalability, and creates blind spots in areas where real-time visibility is critical.
Institutions are often also surprised to encounter the requirement to pre-fund trading accounts in digital asset markets. Unlike traditional financial markets where delivery-versus-payment (DvP) mechanisms and central clearing are standard, many digital asset venues operate on a pre-funded basis to mitigate counterparty and settlement risk. This model is a legacy of the industry’s origins in unregulated, infrastructure-light environments, where trustless execution required assets to be available in full prior to trade.
As a result, institutions must maintain a continuous flow of liquidity from their treasury or custody accounts into trading wallets – posing challenges for capital efficiency and real-time cash management.
These myriad inefficiencies become especially problematic as trading volumes rise and regulatory expectations tighten. Manual intervention and process handoffs between systems introduce delays, errors, and compliance risks – issues that traditional financial institutions can no longer afford to ignore as digital assets move further into the regulatory mainstream.
The case for a unified solution
To overcome the challenges of a fragmented ecosystem, institutions are increasingly seeking an integrated approach that allows for seamless trade execution and custodial connectivity, ensuring that assets are stored securely and can be accessed quickly on demand. Connectivity to multiple trading venues provides cross-market access and liquidity, ensuring optimal conditions for execution and compliance with best execution policies.
Integrated systems should also enable real-time synchronization with internal core systems such as treasury, risk, compliance, and accounting. This alignment ensures not only operational efficiency but also supports regulatory readiness, as firms can generate accurate and timely reports and maintain comprehensive audit trails.
Just as importantly, integration creates a centralized hub for orchestrating trade workflows, spanning pre-trade checks, execution, and post-trade processing. With all key systems connected and data flowing in real time, institutions gain a holistic view of their operations and can make more informed decisions with greater confidence.
Automation enhances the operational backbone
Integration alone is not sufficient to unlock the benefits of a digital asset offering – institutions must also leverage automation as the core engine of operational efficiency. Automation eliminates the need for manual interventions, accelerates workflows, and reduces the potential for human error, making it indispensable in today’s high-speed, high-volume trading environment.
At the pre-trade stage, automation enables dynamic treasury and liquidity management, pre-funding checks, and real-time risk assessments. In turn, this enables institutions to ensure that capital is deployed efficiently, and exposures are managed proactively – an essential capability in volatile and fragmented markets.
During trade execution, automation supports smart order routing strategies across both centralized and decentralized venues. Whether executing through exchanges, OTC desks, or RFQ platforms, automated systems can optimize for best execution while adapting to market conditions on the fly. For institutions with complex execution needs, custom strategies and algorithmic trading models can be configured to operate with minimal oversight.
Post-trade automation brings efficiency to some of the most resource-intensive parts of the trading lifecycle. Settlement, reconciliation, accounting, and portfolio management tasks can all be handled in real time, drastically reducing back-office burden. Automated processes not only speed up transaction finality but also ensure accuracy and transparency. These are all vital requirements for firms operating in a regulated environment.
This infrastructure evolution is particularly valuable as digital assets evolve from a niche asset class into a core component of institutional portfolios. Integration and automation combined form the foundation of a modern, institutional-grade solution for digital asset trading – a one-stop-shop infrastructure that meets the demands of today while anticipating the needs of tomorrow.
Wyden Infinity – an integrated, automated one-stop-shop solution
Wyden meets the demand for institutional digital asset trading infrastructure with a fully integrated, modular, one-stop-shop solution that automates the entire digital asset trading lifecycle.
From custody through execution to settlement and reconciliation via core systems, Wyden Infinity acts as the connective layer between all key functions. A single, centralized platform for all pre-trade, trade, and post-trade workflows, it seamlessly connects with leading custody providers, core banking systems, and 60+ trading venues, and covers treasury, risk, compliance, and accounting capabilities to ensure end-to-end processing.
Pre-trade, Wyden facilitates comprehensive automation of treasury and liquidity management, pre-funding checks, and pre-trade risk management to ensure that capital is available, exposures are controlled, and trades are ready for seamless execution.
The platform ensures best execution across fragmented markets, offering support for exchange trading, OTC trading (RFQ), and both agency and principal trading models. Our CLOB and matching engine capabilities provide custom execution strategies and private liquidity pools for institutional clients.
Post-trade, Wyden clients benefit from automated settlement, reconciliation, accounting, and portfolio management. These features help to streamline back-office operations, reduce manual intervention, and deliver real-time transparency and auditability.
With Wyden Infinity, institutions gain a single, unified infrastructure solution that simplifies operations, enhances scalability, and accelerates time to market – without compromising control or compliance. Furthermore, the modular nature of Wyden Infinity makes it easier for institutions to select the optimal solution to support their digital asset use cases and growth objectives.
Contact us today for an initial discussion about implementing a compliant digital asset offering in your organization.