A cryptocurrency company is on track to purchase the Gibraltar Stock Exchange (GXS).
Valereum Blockchain, a Gibraltar-based blockchain technology group, has signed an option to snap up 80 per cent of the GSX.
If given the green light by regulators, Valereum claims it would establish the world’s first fully regulated integrated fiat and digital exchange, where investors could buy securities using bitcoin, ethereum, dogecoin, cardano and stablecoin tether.
Speaking to This is Money, Richard Poulden, chairman of Valereum, said: ‘Gibraltar is a great place for this world first integrated exchange due to the fact it uses English language, it has a good legal structure and has a robust regulatory environment to European standards.
‘This is a very exciting opportunity for investors as they will be able to use crypto to invest in fiat securities in a fully regulated environment for the first time.’
On the cards: Valereum Blockchain has signed an option to snap up 80% of the Gilbraltar Stock Exchange
No crucial details like price have been disclosed. Valereum said in a statement: ‘As with many exchange transactions the full details remain confidential.’
Valereum’s Mr Poulden, said: ‘This deal represents the next stage in the evolution of digital assets becoming globally accepted and tradeable.
‘It brings crypto closer to the mainstream and opens it up to be used in transactions with other asset classes.
‘Just as The Rock of Gibraltar has been a physical port for centuries, GSX will encourage the next generation of digital assets to see Gibraltar as a virtual node in digital trade.
‘In time we will seek an international listing for the GSX itself as we see this as a compelling investment proposition.’
If the deal goes ahead, current GSX owner, the Global Stock Exchange Group, will retain a 20 per cent stake in the GSX.
Nick Cowan, chief executive of both the GSX and the GSX Group, said: ‘We have grown GSX into an attractive destination for high grade issuers and have to date admitted over 2,500 securities totalling almost $5 billion in value.
‘We welcome Valereum’s option to acquire an 80 per cent stake in the GSX and we look forward to contributing towards Valereum’s goals.’
Price matters: Bitcoin is hovering at around the $62,000 mark today
Speaking to This is Money, Ollie Leech, CoinDesk Learn Editor, said: ‘Gibraltar has already established itself as a fintech hub, as is widely considered a “jurisdiction of choice” for crypto-based businesses too.
‘If Valereum Blockchain wins approval from the GFSC to purchase the Gibraltar Stock Exchange, it would mark a huge moment in history for the digital asset industry.
‘Not only will it serve to bridge the gap between traditional and digital finance, but also add further legitimacy to the crypto market.’
Jodie Gunzberg, managing director at CoinDesk Indexes, added: ‘Allowing digital assets to trade easily on exchange together with traditional assets is an advancement that will allow investors to better diversify their portfolios.’
‘This has been an exciting time for bitcoin with the launch of new bitcoin futures ETFs. However, while investors can easily trade ETFs, the problem is the ETFs hold no bitcoin.
‘Consequently, the returns are not the same, and the risks are different. Futures have a rolling cost from selling expiring contracts and buying later-dated ones and also have position limits that have forced more money into later-dated contracts to make the rolling costs higher. In just one week, the futures-based ETF (BITO) has underperformed the spot fund (GBTC) by about 7.5%, and the rolling cost has doubled.
‘While most view bitcoin as digital gold, the cost of holding the futures contracts is nearly ten times higher as high as gold, equivalent to the cost of holding oil and gas. However, since one can easily buy bitcoin itself, there is no need to hold futures or equities that are linked to bitcoin.’
The price of bitcoin is currently over $62,000, having climbed above $66,000 just days ago. Some experts think it could climb to $90,000 in the not too distant future.
With COP26 just around the corner, some are calling for the decarbonisation of the cryptocurrency sector.
Kirsteen Harrison, environmental consultant at Zumo, said: ‘The crypto sector must aim for full decarbonisation by 2030.
‘For crypto to reach its full potential and be widely adopted by society, the sector urgently needs to address its carbon footprint.
‘Fortunately the crypto sector has a relatively easy decarbonisation path ahead of it, compared to many other sectors.
‘In crypto, decarbonisation can be achieved simply by using renewable electricity. There are no complex supply chains, no deeply entrenched ways of working, and we have a clear understanding of where the impacts are.
‘This puts us streets ahead of many other sectors, including traditional finance, which has a complex web of financed emissions to deal with. We are a young and agile sector, and we have a huge opportunity to show the world how an entire sector can fully decarbonise.’
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