The investment in Global Futures & Options Holdings (GFO-X) has been made in response to institutional investor demand, according to M&G, which cited a 2022 BNY Mellon survey that found 91% of institutional investors are “interested in tokenised products”.
GFO-X is set to become the UK’s first Financial Conduct Authority-regulated exchange for digital currency asset derivatives, according to M&G, thanks to its strategic partnership with London Clearing House.
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The investment comes from M&G’s Crossover strategy, led by the firm’s public equity investment division.
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Jeremy Punnett, M&G portfolio manager, said: “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.”
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GFO-X CEO Arnab Sen added: “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.”
