Executive Summary
Touch-Fire was engaged by a leading licensed and regulated digital asset bank to design and deploy a next-generation trading gateway. The objective was to replace an inflexible legacy framework with a high-capacity, microservices-driven architecture capable of serving retail wallet customers with tight, localised spreads while managing the downstream risk of cross-border liquidity providers.
The solution required engineering a real-time Synthetic Price Engine that programmatically combines international cryptocurrency quotes with spot foreign exchange (FX) feeds to deliver an actionable, local currency order book. Coupled with a dynamic Trade Book Balancer, the system completely automates market-making risk by executing immediate delta-hedging across global counterparties.
99.95%
Monthly uptime SLA
7 years
Immutable audit trail retention
3-step
Synthetic pricing algorithm
Zero
Manual hedging interventions
Moving Beyond the Central Limit Order Book
To appreciate the design of this trading gateway, it is important to understand how its core paradigm departs from a traditional Central Limit Order Book (CLOB). Where a CLOB is a peer-to-peer venue that only matches pre-existing internal buyers and sellers, the Synthetic Price Engine generates actionable quotes in real time from external global sources — and absorbs all currency risk within the quoting layer itself.
| Feature |
Traditional CLOB |
Touch-Fire Synthetic Engine |
| Liquidity Sourcing |
Peer-to-peer; matches discrete internal buyers directly against internal sellers at fixed price ticks. |
Aggregated, multi-venue sourcing from diverse global institutional LPs and FX market makers. |
| Pricing Mechanism |
Discovered solely through organic supply and demand within the localised pool. |
Programmatically generated via a real-time, multi-leg cross-currency conversion calculation. |
| Currency Risk |
Participants must trade the native currency denomination of the listed asset book. |
Automatically absorbs cross-border currency conversion directly into the quote generation layer. |
| Inventory Management |
The venue takes no risk; trades only execute if matching counterparties exist on the book. |
Immediate internal confirmation to the retail client, offset by an automated backend delta-hedging balancer. |
The Challenge: Localising Liquidity Under Strict Bank Compliance
The client operated a high-volume wallet application with hundreds of thousands of users. Their legacy system was constrained to inbound feeds already converted into local currency, severely limiting the pool of competitive liquidity providers. Three critical mandates drove the project brief:
As a licensed bank, the client demanded exhaustive documentation, formalised change control, rigorous quality assurance, and strict fault-tolerant system availability — targeting a 99.95% monthly uptime SLA. Every system change had to pass multi-stage review cycles before deployment, and all trade data had to be archived in immutable ledgers for seven years to meet statutory financial reporting requirements.
Every customer execution in local currency generated an immediate dual exposure: a cross-border digital asset exposure quoted in USD and a foreign exchange exposure in USD/JPY. The system had to manage this inventory drift instantly and continuously — measuring positions across both legs in real time — without human intervention. A delay of even a few seconds between customer fill and hedge execution would expose the bank to material market risk.
The underlying matching infrastructure had to seamlessly handle both Spot digital asset execution and leveraged Contract for Difference (CFD) products across the same foundational core. This required a unified order management system capable of applying different margining models, product-specific price band controls, and segregated position accounting — without running separate matching engines per product type.
The Solution: Integrated Pricing, Microservices & Automated Hedging
Touch-Fire engineered a modular, highly scalable microservices architecture designed to decouple quote generation from order execution and risk balancing. Each component is containerised independently (Docker), allowing the bank to scale specific pricing feeds, LP adapters, or hedging balancers without touching the rest of the stack.
[ Global Crypto LPs (USD) ] [ Global FX Market Makers ]
\ /
v v
[ LP Price Adapters ] [ FX Price Adapters ]
\ /
+-----------------+----------------+
|
v
[ SYNTHETIC PRICING ENGINE ]
(Integrated Currency Conversion)
|
v
[ Actionable JPY Quote Feed ]
|
v
[ Retail Wallet Frontend ]
|
(Customer Order) v (Immediate Fill Confirmation)
=========================================================================
|
v
[ TRADE BOOK BALANCER ]
(Automated Delta-Hedging Engine)
|
+------------------+------------------+
| |
v v
[ Unified Matching Engine ] [ FX Hedging Balancer ]
| |
[ Global Crypto Orders ] [ Spot FX Cover Orders ]
Rather than relying on pre-converted books, the gateway ingests raw USD-denominated crypto depth and live USD/JPY spot exchange rates simultaneously. The core innovation lies in integrating currency conversion directly into the quote generation layer before publishing the order book — unlocking access to the full global pool of USD-quoted crypto liquidity providers.
The engine applies a price uncrossing algorithm across the aggregated stack to eliminate negative spreads, then transmits a clean, actionable JPY order book to the retail frontend via low-latency web sockets.
When a retail client executes against the published JPY book, the gateway provides instant execution back to the wallet app. The Trade Book Balancer then routes the transaction immediately to the Unified Matching Engine (UME) for risk offset:
- Auto-Marrying Internal Flow: The balancer continuously checks internal inventory. If an opposing retail position already exists, the system automatically crosses them internally — eliminating unnecessary external transaction fees.
- Automated Parent/Child Delta-Hedging: If net exposure remains, the balancer generates a "Parent" hedging order. The UME slices this into "Child" market or Request-for-Stream (RFS) orders, routing them to the external LP offering the optimal execution path.
- Fail-Safe "Book Pending" Protocol: If an LP connection drops or rejects a child cover order, the balancer automatically switches the affected asset book into a protected "Pending" state — halting automated execution and alerting the institutional dealing desk.
The entire platform is built on an event-driven microservices model using containerised environments (Docker). This architecture allows the bank to independently scale individual components as retail transaction volumes surge — adding LP adapter instances, spinning up additional pricing workers, or scaling hedging balancers — without any impact on other services.
Each service communicates via a low-latency message bus with guaranteed delivery semantics, ensuring that no customer execution event is lost even under partial infrastructure failure.
Results & Performance Impact
The deployment delivered complete institutional command over a highly complex, multi-currency retail infrastructure while strictly adhering to rigorous bank compliance guidelines.
By sourcing global USD order books and processing cross-currency execution internally in real time, the bank dramatically compressed its operational spreads — outperforming localised retail competition that remained reliant on pre-converted feeds from a narrower LP pool.
Built on a microservices model using containerised environments (Docker), the deployment allows the bank to independently scale pricing feeds, specific LP adapters, or hedging balancers as retail transaction volume surges — without disrupting unaffected system components.
The platform features automated statutory reporting capabilities. It seamlessly generates immutable transaction ledgers and localised order slips — including detailed breakdowns of child orders and synthetic execution pricing — archiving them for seven years to meet strict financial services compliance mandates.
Leveraging an integrated telemetry stack featuring Prometheus, Grafana, and centralised log management via Graylog, level-1 and level-2 support operators maintain real-time visibility into system health, WebSocket latency, container resources, and network throughput.
Prometheus
Grafana
Graylog
Docker
WebSocket
The Technology Behind This Solution
Touch-Fire's synthetic pricing and automated hedging capabilities are available as the foundation for your own digital asset exchange, regulated wallet platform, or multi-currency brokerage — including the LP adapter framework, the delta-hedging balancer, and the compliance reporting layer.
Unified matching engine supporting Spot, CFD, and Derivatives products — with Smart Order Routing and RFQ.
Automated post-trade processing, statutory reporting, and seven-year immutable audit trail generation.
End-to-end regulated exchange and wallet platform solutions for digital asset banks and brokerages.