What does c2c over-the-counter transaction mean?

C2C OTC trading is a financial transaction conducted directly between individuals or entities, bypassing centralized exchanges or brokers. It offers flexibility, privacy, and greater liquidity than centralized exchange trading, but is riskier, less transparent, and difficult to execute.

What is C2C OTC trading?

C2C OTC trading (also known as peer-to-peer OTC trading) is a financial transaction that occurs directly between buyers and sellers, without going through a centralized exchange or broker.

How does it work?

• Buyers and sellers connect in the OTC market, bypassing centralized exchanges.
• The parties to the transaction directly negotiate the price and transaction terms of the asset.
• Trading can be conducted through a variety of channels, such as social media, messaging apps or dedicated OTC platforms.
• After the transaction is completed, the two parties directly exchange assets and funds.

How is it different from trading on a centralized exchange?

• Counterparty: The counterparty to OTC trading is an individual or entity, not a centralized exchange.
• Pricing: The price of OTC transactions is determined by negotiation between the two parties and is not determined by market supply and demand dynamics.
• Transparency: OTC trading is generally less transparent than trading on centralized exchanges because transaction details are not made public.
• Regulation: OTC transactions may be less regulated because they are not conducted through a centralized exchange.

Advantages:

• Flexibility: Both parties can negotiate tailor-made transaction terms.
• Privacy: Transaction details will not be made public.
• High Liquidity: For some assets, OTC markets can provide higher liquidity due to the larger number of participants.

Disadvantages:

• Higher Risk: Due to lack of regulation, OTC trading can be subject to fraud or loss of funds.
• Lack of Transparency: Trading information is not public, which can make it difficult for investors to assess risk.
• Difficult to Enforce: Transaction terms can be difficult to enforce because there is no central authority to oversee it.

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