There are plans to launch the first global cryptocurrency stock exchange in Gibraltar to allow investors trade traditional stocks and other investment products in digital currencies.
Paulden plans to fulfill the initiative if his Gibraltar-based company Valereum successfully buys an 80 percent stake in the Gibraltar Stock Exchange (GSX). The deal is currently under consideration by regulators.
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“Valereum’s plan makes crypto a more attractive asset because you can put a portion of your cryptocurrency savings into a fiat security, you can borrow against that, and buy a house,” said Paulden.
The executive director of Valereum, Patrick Lyle Young, maintains that if the company holds the majority stake in GSX, it will still operate like a traditional exchange, but investors can pay trades in cryptocurrencies.
Under the plan, investors could exchange cryptocurrencies for stocks held in a trust company belonging to the exchange.
According to Young, based on the bullish outlook for assets like Bitcoin, holders are unwilling to sell due to issues like tax liability. Therefore, an exchange offers an opportunity to buy another asset denominated in cryptocurrency.
The company is also lining up a funding round to raise £50 million ($67.6 million) for investment in the possible exchange. However, Valereum has not revealed how the exchange will be set up and the technology to use, considering the complexity of the cryptocurrency sector.
Bitcoin among assets to be listed
Furthermore, while announcing plans to acquire GSX, Valereum identified Bitcoin, Dogecoin, Cardano, Ethereum, and Tether, among assets that will be approved for trades on the stock exchange. The company plans to expand the list pending regulatory approval.
At the same time, GSX is not new to cryptocurrencies after rolling out BitcoinETI, a Bitcoin-backed exchange-traded instrument, in 2016. However, the product was delisted in 2017.
The overall plan is anchored on Gibraltar’s status as a tax haven with financial regulators realigning the sector. Recently, authorities have been moving to present the country as a global cryptocurrency and blockchain hub.
Consequently, Gibraltar has continued to attract leading crypto businesses thanks to the smooth regulatory system.