M&G, the investment arm of the UK-based pension fund, has made a significant move into the cryptocurrency space by investing $20 million in Global Futures & Options Holdings (GFO-X), the country’s first regulated Bitcoin derivatives exchange. The investment is part of a $30 million Series B funding round for GFO-X, with the platform initially focusing on clearing Bitcoin index futures and options contracts.
This strategic investment by M&G, as part of its Crossover strategy, opens the door for traditional financial institutions to gain exposure to cryptocurrency derivatives trading. GFO-X is set to become a Financial Conduct Authority (FCA) regulated and centrally-cleared trading platform for crypto derivatives, providing a secure and compliant avenue for institutions to explore this emerging asset class.
The funding from M&G’s Crossover strategy, derived from a series B funding round linked to the $138 billion Prudential With Profits Fund, aims to establish a hub for trading and clearing cryptocurrency derivatives. As part of the deal, M&G will join the board of GFO-X, reflecting a commitment to actively participate in the growth and development of the platform.
Jeremy Punnett, portfolio manager at M&G, emphasized the potential for the UK and London to become leaders in cryptocurrency technology and investment. He highlighted the challenges faced by the digital currency trading market due to the lack of regulated trading venues and expressed optimism that the investment in GFO-X would contribute to overcoming these obstacles.
GFO-X CEO Arnab Sen acknowledged the complexity of building a regulated financial market ecosystem for digital assets. He emphasized the importance of collaboration between traditional market participants and modern innovators to ensure the long-term viability of digital assets and the integration of cryptocurrencies into mainstream finance offerings.
Sen also mentioned the evolving UK and European regulations that are facilitating the entry of cryptocurrencies into mainstream finance. However, he emphasized the need to integrate traditional market structures to address perceived risks associated with this emerging asset class.
As investors increasingly express interest in cryptocurrencies, regulatory bodies like the FCA have issued guidelines to industry service providers to ensure compliance with UK crypto-asset promotion rules. This investment by M&G signifies a growing recognition of the cryptocurrency market’s potential and a proactive approach to foster innovation while adhering to regulatory standards.