Digital Currency Revolution Series: FCA Regulated Securitization Firm Comes-up With Bitcoin Bond

Cryptocurrency has been the center of attraction in the recent past among the wide ranges of the asset class. Cryptocurrency is growing its popularity and making traction everywhere right, left, north, south, and center, be it derivatives, or commodity-driven or currency-pegged or bonds, including cryptocurrency ETFs, futures, CFDs, and cryptocurrency options, etc) have been under the meticulous scanner of the renowned global regulators, such as, US SEC, CFTC and UK’s Financial Conduct Authority (FCA). 

Most importantly, various crypto-firms are obtaining a license also from CFTC for bitcoin futures trading mechanism, like, Bakkt, LedgerX, and ErisX.

The UK regulator the Financial Conduct Authority (FCA) has recently given the approval to ‘Prime Factor Capital’ to operate as a full-fledged alternative investment fund manager (AIFM). Prime factor Capital is headquartered in London, the crypto asset management firm is the first to be approved as a crypto-focused hedge fund by the United Kingdom’s market watchdog. 

For now, the two European companies have reportedly unveiled the world’s first genuine bitcoin (BTC) bond on 3rd July.

Argento, which is a Luxembourg-based securitization firm, has joint ventured with London Block Exchange (LBX) to issue the bitcoin-denominated bond, which is regulated by the United Kingdom’s regulator, the Financial Conduct Authority (FCA).

As per Phil Millo’s tweet, the manager of Argento, the world’s first bitcoin-denominated bonds is launched. The bonds are priced in bitcoin, settle in bitcoin, pay monthly coupons in bitcoin, redeem in bitcoin, and have zero fiat anywhere in the structure!

He further says “We are thrilled to have structured and produced the world’s first institutional grade bitcoin-denominated financial product… The large investment banks really dropped the ball on this one.”

While Benjamin Dives, the CEO of LBX mentioned: “This is an excellent product for people who currently hold bitcoin and aren’t planning to sell over the next few years - the so-called ‘HODLers’. Now, for the first time, they have an institutional grade way of making their wallets grow without exposing their bitcoin to the swings of the traditional ‘fiat’ currency markets.”

The Argento-LBX bond represents the first regulated cryptocurrency product which has no fiat exposure at all for the investor. Gone are the days, the governments of quite a few emerging economies used to convey the International Monetary Fund (IMF) about their obsession in issuing bonds pegged to bitcoin in the yesteryear, now, the DM has come up with such an innovative move, we could foresee that this could indeed be a paradigm shift in the financial market.

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards 98 levels (which is highly bullish), USD is at -25 (mildly bearish), while articulating (at 11:23 GMT). 

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