The custody and execution platform provider Copper launches a new service for institutional investors. With it, the creation of securitized token for digital asset-based products is possible. After already launching a new trading tool to minimize credit risk exposure earlier this year, Copper announced its new addition to the service portfolio.
About Copper – Custody, execution, account management all in one platform
Copper is a London-based digital asset infrastructure provider. One of the company’s self-proclaimed goals is to continue making the digital asset industry available and accessible to everyone.
For this reason, Copper developed a secure platform to facilitate investment and management of digital assets. Through its platform, investors are able to benefit from Copper’s dedicated account management, custody and execution services.
The 2018-founded provider offers services in relation to custody, inter-exchange custody, settlement and clearing, execution and OTC.
Copper’s new service: Bridging the gap between traditional financial services and digital assets
Copper has launched their latest service, Copper Catalyst. With it, the custody provider wants to “bridge the gap” between traditional financial services and the emerging market of digital assets. For this, Copper’s new service will assist institutional investors with the creation of securitized token for digital-asset based products.
As Dmitry Tokarev, CEO of Copper, stated:
“The crypto fund industry has shown enormously promising growth over the last decade, with impressive strategies and an excellent return for investors. But it is no secret that there has been a clear barrier to their graduation into the investment mainstream: the lack of feasible securitization options. With sky-high costs and extensive compliance issues associated with most available structures, there is a gulf between traditional financial markets and this next generation of funds: a gulf that Copper Catalyst will bridge.”
Barrier of entry to digital asset industry: Digital asset custody
The search for an entry into the digital asset industry can be challenging for traditional investors. Still, the attractiveness of the industry has led to an increased interest from traditional investors. As Tokarev commented:
“More and more, we are seeing traditional investors looking for exposure in cryptoassets – not least as a hedge against the economic damage and impending inflation as a result of the COVID-19 pandemic.”
Traditional financial service providers have been cautious when it comes to entering the digital asset space. Among other factors, a major barrier for entry remains the perceived risk surrounding digital asset custody. Copper’s new service targets this barrier by mitigating that risk.
Copper Catalyst – Securitized token for digital asset-based products
Copper Catalyst will allow digital asset funds to issue securities on digital assets. With Catalyst, the creation and issuance of such securities is promised to be faster and more cost-efficient. In addition, the securities will be fully bankable and clearable as a Swiss security (ISIN). As such, institutional investors can create and trade securitized versions of complex strategies without the necessity of trading or holding the assets. Copper is providing the custody for the issued securitized token.
In the past, issuing bankable and clearable securitized products was expensive and especially complex when it came to fulfilling compliance requirements. The Catalyst platform solves these issues: It allows each issued security to be an actively managed certificate (AMC). On top, these AMCs will receive a license with a Swiss-registered International Securities Identification Number (ISIN). Adding ISIN, gives the certificates an accepted identifier making them fully bankable, tradable and clearable across a number of European exchanges. Furthermore, the token will be subject to existing securities regulation.
The expectation is that Catalyst will help cut costs of securities issuance by more than half. Moreover, Catalyst promises a lower time to launch issuance vehicles. Thus, launching issuance vehicles will no longer take months (or weeks in the case of AMCs) but only days.
The new service is already in use
Copper announced that five funds are already applying Catalyst to create digital asset-based products. These are tradable, and therefore similar to traditional stocks. The funds are creating securitized token around arbitrage, yield and volatility in trading strategies. Copper’s CEO, Dmitry Tokarev, announced that 10 more companies plan to use the new service.
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