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Cryptoasset developments in the funds industry

cryptocurrency_fundsOver a quarter of institutional investors believe that pension funds, insurers, family offices and sovereign wealth funds will “dramatically” increase their allocations to cryptocurrencies over the next five years, according to a study.

Over 75% say it is because they expect more mainstream fund managers and financial services companies to enter this market, and there will be more funds and investment vehicles in the cryptoasset space to choose from.    

In December last year, Boston-headquartered Fidelity Investments set up a new entity to serve European institutions investing in digital assets, building upon the firm’s existing US crypto business.

More recently, investing in digital assets – including funds – through tokenisation took a step forward after London-based Archax became the first digital securities exchange and custodian in the UK to be regulated by the Financial Conduct Authority (FCA).

Archax said its regulatory approval was a milestone for the emerging global digital securities ecosystem because it means that digital issuances from across the world will be able to trade on an FCA-authorised secondary market for the first time.

In the same week in August this year, two firms said they have developed an exchange infrastructure for businesses to launch traditional, alternative and digital asset markets around the world.

The infrastructure results from a partnership between Exberry, an exchange technology developer, and Digital Asset, which provides open-source smart contract language. 

It would mean any business developing a new digital asset marketplace could launch "in a matter of days" with a fully-compliant, end-to-end exchange platform and a "near risk-free" post-trade settlement registry.

In July, an actively-managed crypto exchange-traded product (ETP) was been launched by Ficas on the Six Swiss stock exchange.

Ficas, a Switzerland-based crypto investment management boutique which will manage the ETP, claimed that the product is the first actively-managed cryptocurrency ETP.

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