First Bitcoin (BTC) Bond Announced by Argento and London Block Exchange
In a first of a kind financial instrument, the London-based exchange operator and Luxembourg’s Argento unite to offer a fiat-free bond.
Argento Access, a Luxembourg-based securitization firm, has partnered with London Block Exchange to create the first Bitcoin (BTC) based bond product. The bond will be available immediately, the firms announced.
The bonds will be exclusively traded on the LBX Trader, and have been underwritten by a local custodian, fully regulated with the Financial Conduct Authority. The buyers and holders of the notes are also recorded on the blockchain for additional security.
Phil Millo, Argento’s Manager said: “We are thrilled to have structured and produced the world’s first institutional grade Bitcoin-denominated financial product. The large investment banks really dropped the ball on this one.”
Benjamin Dives, CEO of LBX said: “This is an excellent product for people who currently hold bitcoin and aren’t planning to sell over the next few years -- the so-called ‘HODLers’. Now, for the first time, they have an institutional grade way of making their wallets grow without exposing their bitcoin to the swings of the traditional ‘fiat’ currency markets.”
The bond will be available in various durations, mimicking the jargon of the crypto community - “FOMO”, “HODL”, “LAMBO”, and “MOON”.
However, the announcement arrived just at the time that the FCA was mulling a ban on crypto-derivative products. At the same time, a Bitcoin-only bond, traded without handling fiat, may continue to exist in the current regulatory climate.
“The bond settles in bitcoin, is priced in bitcoin, pays monthly coupons in bitcoin, redeems in bitcoin, and has no traditional ‘fiat’ currency exposure anywhere in the structure,” reads the announcement.
A Bitcoin-based bond means issuers can receive interest on a fully non-fiat investment. The product may appeal more to BTC owners, but it is also an approach to achieving mainstream acceptance for investments in digital assets. In the past years, large-scale BTC holders have seen the rise of multiple lending schemes, which turned out to be fraudulent and risky. A Bitcoin bond, however, would preserve the original assets while promising reasonable returns.
BTC market prices have remained volatile, especially gaining pace in the past month. BTC traded at $11,608.03 as of 12:07 UTC on Thursday.