M&G Investments, the asset management division of Pensions giant M&G, has invested $20 million in Global Futures & Options Holding (GFO-X), a U.K. crypto derivatives exchange, as part of a Series B funding round, the company said in a statement Monday.
GFO-X is the U.K.'s first Financial Conduct Authority (FCA)-regulated and centrally-cleared trading venue for crypto derivatives following the announcement of a strategic partnership with LCH SA, the London Stock Exchange's (LSEG) Continental European clearing house in April this year.
M&G’s investment in the sector comes amid a broad rebound in cryptocurrency markets, which have surged in recent months in anticipation of the approval of a spot bitcoin exchange-traded-fund (ETF) in the U.S. It is hoped that approval of such an ETF will lead to a flood of liquidity in the crypto market, led by traditional institutions looking to access the digital assets market through regulated instruments.
GFO-X allows traditional financial institutions to trade cryptocurrency derivatives in a safe and regulated venue, and M&G's funding will help create a global hub for the trading and clearing of digital asset derivatives, the investment firm said.
"The lack of regulated trading venues is materially hampering the growth of the digital currency trading market," said M&G portfolio manager Jeremy Punnett, adding that the "U.K. has the potential to become a global hub for digital asset technology and investment."
M&G will also join the board of GFO-X.