Business

Steve Kaaru

Currency.com to offer first government bonds pegged to crypto

For a long time, the crypto community has not found a way to integrate itself with the traditional financial system. Not anymore. Belarusian cryptocurrency trading startup Currency.com is seeking to change this. The company recently announced that it will launch the world’s first government bonds pegged in crypto.

The firm will now allow its users to “trade and invest in tokenized government bonds using fiat money, Bitcoin Core (BTC) or Ethereum (ETH).”

According to its press release, it will start off with tokenized Belarusian government bonds. With time, it intends to integrate additional tokenized government and corporate bonds.

The firm has been operating in beta since January 2019. At the time, it opened its platform to select people in the crypto and finance sectors. According to TechCrunch, the company attracted over 150,000 interested individuals but only enlisted 5,000 for the initial phase. Once it fully launches its services, it intends to list over 1,000 tokenized securities. Unfortunately for those residing in the U.S., Currency.com will not offer its services there due to regulatory hurdles.

While skeptics have criticized cryptos due to their price volatility, the new product could change this. Crypto owners will be able to invest their cryptos in the very stable government bonds. Moreover, these bonds generate interest every year unlike cryptos. Ivan Gowan, the platform’s founder explained:

“The arrival of tokenized securities will completely change how investors can use their cryptocurrencies. Linking crypto to the price of stocks and shares provides a tangible way for holders of Bitcoin and Ethereum to access traditional financial markets. Our beta launch proved the appetite is there globally for a service like this and Currency.com’s full launch marks a significant shift in the direction of crypto as it becomes more regulated and starts to move closer towards traditional markets.”

The tokens will be priced at $1,000 which corresponds with the actual price of the bonds. However, users will be able to buy fractional tokens. The associated interest will be paid in either U.S. dollar or BTC and ETH.

The launch comes at a crucial time in which major stock exchanges are looking into offering tokenized securities. The London Stock Exchange, The Swiss Stock Exchange and NASDAQ are some of the major exchanges that have expressed an interest.

Currency.com’s success will also owe a lot to regulators’ stance across the globe. In some jurisdictions, regulators have a negative view of all things crypto and this could prove to be a big challenge. However, with major economies like Japan, South Korea and the U.S. warming up to the industry, the sky could be the limit for the Belarusian startup.

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