British asset manager Abrdn purchased a stake in Archax, the first regulated digital securities exchange in the United Kingdom. In the official deal announcement, Abrdn’s CEO Stephen Bird said blockchain technologies will inevitably shape an important part of the future of financial markets.
Abrdn Becomes Archax’s Largest External Shareholder
Scottish asset management firm Abrdn announced it bought a stake in Archax. The deal makes Abrdn the largest external shareholder of Archax, the first regulated digital securities exchange in the U.K.
Based in London, Archax offers its clients access to digital assets and serves as a bridge to traditional financial markets. In addition to making it Archax’s biggest external shareholder, the deal will also give Abrdn a seat on the company’s board.
In the official news release, Abrdn’s Chief Executive Officer Stephen Bird voiced his optimism about the future of blockchain. He said blockchain technologies “are inevitably going to form a big part of the future of financial markets.”
“There is the potential to offer greater transparency, greater speed, and less trading friction by using these nascent digital technologies.”
– Stephen Bird
Founded in 2018, Archax is the first and only digital securities exchange that obtained approval from The Financial Conduct Authority (FCA) to provide crypto trading, custody, and brokerage services. The exchange is expected to launch later in 2022.
“Archax is one of the most promising UK players in this next expected high growth area in finance – the use of digital and tokenized securities with same-day settlement. In that sense, the growth of the digital investment market is about much more than cryptocurrencies.”
– Stephen Bird
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Institutional Investors’ Interest in Digital Assets on the Rise
The deal between Abrdn and Archax underscores the growing interest in blockchain and digital assets among institutional investors. On Thursday, the largest asset manager in the world BlackRock unveiled a spot bitcoin a private trust to attract more institutional investors. The move came just a week after the U.S. asset manager joined forces with Coinbase to provide crypto services.
What’s even more interesting is that this series of deals come amid an extremely challenging year for the crypto space. Numerous cryptocurrencies are down at their multi-year lows, while several major crypto firms like Voyager Digital and Celsius Network fell into bankruptcy in recent months.
This “crypto winter”, prompted by record-high inflation, geopolitical tensions, and sharp interest rate hikes by global central banks, marks a sharp U-turn for crypto assets from last year when a number of them hit all-time highs. Both Bitcoin and Ethereum remain down more than 60% from their peaks in November 2021.
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About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.