UK asset management firm M&G Plc has recently made a significant move in the cryptocurrency market. The company has invested $20 million in Global Futures & Options Holdings (GFO-X), a bitcoin derivatives exchange. This investment aims to support the “regulated trading of digital assets” and meet the growing demand from institutional investors.
The Need for Regulated Trading Venues
In recent years, there has been a lack of trust in the cryptocurrency space, and many have called for more regulation around exchanges. Jeremy Punnett, a portfolio manager at M&G, highlighted the importance of regulated trading venues: “The lack of regulated trading venues is materially hampering the growth of the digital currency trading market,” he said in a press release.
With its partnership with London Clearing House, which is regulated by the Financial Conduct Authority (FCA), GFO-X will act as a clearing house and trading venue for digital currency asset derivatives. This collaboration with a regulated entity ensures a safe and secure environment for investors.
GFO-X: A Global Trading Venue
M&G sees the potential for the UK to become a global hub for digital asset technology and investment. London, in particular, is an excellent destination for GFO-X’s new global trading venue. The investment from M&G enables GFO-X to scale its operations as more investors shift their trading from unregulated to regulated venues.
“This investment enables GFO-X to scale its operations as the business is set to benefit from investors shifting their trading from unregulated to regulated venues,” adds Punnett.
GFO-X aims to target traditional financial institutions that are interested in trading digital currency derivatives in a safe and regulated environment. According to M&G, a 2022 survey indicated significant demand from institutional investors for infrastructure. The survey found that 91% of institutional investors are interested in tokenized products, 41% currently hold cryptocurrencies, and an additional 15% plan to add digital assets to their portfolios in the medium term.
