Supports development of UK financial markets infrastructure for safe, regulated trading of digital assets to meet demand from institutional investors
London: 11 December 2023 – M&G Investments today announces it has invested $20 million into Global Futures & Options Holdings (GFO-X), which through its strategic partnership with London Clearing House, will become the UK’s first FCA-regulated and centrally-cleared trading venue for digital currency asset derivatives.
Against the backdrop of an evolving and maturing regulatory landscape for digital currency assets, GFO-X will provide a venue for traditional financial institutions to trade digital currency derivatives in a safe and regulated venue. A 2022 survey indicates significant demand from institutional investors for infrastructure which can deal with both traditional and digital assets, citing that 91% of institutional investors are interested in tokenised products, 41% currently hold crypto currencies and a further 15% plan on adding digital assets to their portfolios over the medium term*.
The capital was provided by M&G’s Crossover strategy (Crossover) in a series B funding round on behalf of the £129 billion Prudential With Profits Fund. Led by M&G’s public equity investment division, Crossover is a global strategy providing patient growth equity to high quality, fast growing, private companies, enabling their eventual crossover from the private market to the public world. M&G’s funding will create a global hub for the trading and clearing of digital asset derivatives, supporting future innovation in the regulated digital asset sector, whilst enhancing trust and credibility in the market. M&G will also join the Board of GFO-X.
M&G Portfolio Manager, Jeremy Punnett, says: “The lack of regulated trading venues is materially hampering the growth of the digital currency trading market. The UK has the potential to become a global hub for digital asset technology and investment, making London an excellent destination for GFO-X’s new global trading venue. 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.”
Arnab Sen, CEO of GFO-X, adds: "Evolving regulation will bring digital assets into mainstream finance. This transition demands traditional market structures to solve the multiple risks currently associated with the digital asset market. However, building a regulated financial market ecosystem is complex, time-consuming and expensive, and the pitfalls of taking shortcuts are now clear for all to see. The long-term viability of digital assets and the digitisation of real tangible assets requires careful collaboration between traditional market participants and modern innovators. Having a patient, long-term capital partner such as M&G is crucial as we build the next generation of global financial market infrastructure for digital assets."