M&G Backs UK’s GFO-X with $20M in Bitcoin Derivatives

The investment arm of M&G, a pension fund based in the United Kingdom, has allocated $20 million to Global Futures & Options Holdings (GFO-X), which is the inaugural regulated Bitcoin derivatives exchange in the country.

The investment details, which are included in a Series B financing round of $30 million for the derivatives exchange, were disclosed in a joint statement by M&G and GFO-X. The platform will initially provide settlement services for Bitcoin index futures and options contracts.

This action grants conventional financial institutions access to an array of investment products comprised of cryptocurrency derivatives. GFO-X is positioned to become a centralizedly certified and Financial Conduct Authority (FCA)-regulated trading platform for crypto derivatives.

The investment capital originates from a Series B financing round in which the $138 billion Prudential With Profits Fund provided seed money for M&G’s Crossover strategy. With “patient growth equity” in mind, the Crossover strategy invests in rapidly expanding private companies.

The funding is intended to nurture innovation in the sector and establish a central location for trading and clearing cryptocurrency derivatives. As part of the investment, M&G is appointed to the GFO-X board.

Jeremy Punnett, portfolio manager at M&G, emphasized in a statement the potential for London and the United Kingdom to emerge as a preeminent hub for cryptocurrency investment and technology.

Punnett further stated, “The absence of regulated trading venues significantly impedes the expansion of the digital currency trading market.” Changing regulations in the United Kingdom and Europe, according to the CEO of GFO-X, Arnab Sen, will facilitate the integration of cryptocurrencies into conventional financial offerings.

However, the achievement of this outcome is contingent upon the integration of conventional market structures in order to mitigate perceived risks linked to the nascent asset class. Sen stated, “However, constructing a regulated financial market ecosystem is difficult, time-consuming, and costly, and the consequences of attempting to save money by cutting corners are now readily apparent.”

“The long-term viability of digital assets and the digitization of real tangible assets requires careful collaboration between traditional market participants and modern innovators.”

In light of the ongoing investor interest in cryptocurrencies, the FCA has recently issued industry service providers supplementary guidelines to ensure adherence to UK crypto asset promotion regulations.

While certain operators have chosen to withdraw from the United Kingdom, others have made efforts to comply with stringent criteria in order to advertise there.