What Is OTC Trading?
OTC stands for over-the-counter. OTC trading means transacting directly with a counterparty rather than routing an order through a public exchange.
On an exchange, your order enters an order book and gets matched against other participants. On an OTC desk, the desk quotes you a price and takes the other side of the trade itself. There is no order book, no matching engine, and no other participants involved in your transaction.
OTC trading is standard practice in institutional finance. It is how large FX transactions, bond trades, and increasingly large crypto conversions are executed by banks, funds, and corporate treasuries.
What Is an OTC Desk?
An OTC desk is a trading counterparty that specialises in executing large or time-sensitive transactions directly with clients. The desk sources liquidity from its own institutional network, quotes a firm price, and settles directly to the client's account.
For businesses, this typically means one point of contact, a quoted rate that is locked in before funds move, and settlement to a named account in the agreed currency. The transaction is documented with a written confirmation, not just an exchange receipt.
What Is RFQ in Trading?
RFQ stands for Request for Quote. It is the mechanism used to get a price from an OTC desk.
Rather than placing a market order and receiving whatever rate the exchange delivers, a client submits a request specifying the asset, direction, and amount. The desk responds with a firm all-in price: rate, spread, and fee combined. The client accepts or declines. If they accept, that price is binding.
RFQ means no surprises at settlement. The cost of the transaction is known before it is executed.
Why Businesses Use OTC Instead of an Exchange
Exchanges are built for retail volume. They work well at small sizes but create problems at scale.
The main issue is market impact. When a large order enters a public order book, it moves the price. By the time the order fills, the rate is worse than the one displayed when the decision to trade was made. This is slippage, and it compounds at size.
OTC execution avoids this entirely. The desk absorbs the full trade and manages its own position separately. A $500,000 or $5,000,000 conversion executes at the quoted rate without touching the public market.
The other issue is settlement. Exchange accounts are pooled. An OTC desk settles to a named, segregated account in the agreed currency, on the agreed date, with a written confirmation both parties can reference.
How to Convert Large Amounts of Crypto to Fiat
For businesses converting crypto treasury to operational fiat, OTC is the standard approach above a certain size. The process is straightforward: submit a request with the asset, target currency, and amount. Receive a firm quote. Confirm and send funds. Receive fiat to the named account.
A regulated OTC desk will also handle the compliance layer: source of funds, Travel Rule obligations for crypto transfers, and transaction documentation that holds up under audit. This matters for corporate governance in a way that an exchange withdrawal record does not.
What to Look for in an OTC Desk
Regulatory status is the first filter. The desk should operate under a recognised framework with AML/CTF obligations, not just terms of service. In Switzerland, that means VQF membership under FINMA oversight. In other jurisdictions, look for an equivalent supervised structure.
Settlement infrastructure matters too. Named accounts in the currencies you need, documented confirmations, and a clear prefunding process are baseline requirements for a desk operating at institutional standard.
BlockRiver AG is a Swiss financial intermediary and VQF member operating an institutional OTC desk for corporate and professional clients. Services cover crypto-to-fiat conversion and foreign exchange across USD, EUR, GBP, CHF, and AED.
