M&G Plc Invests $20 Million in UK Crypto Platform GFO-X, Signaling Renewed Institutional Confidence in Digital Assets

M&G PLC, a major player in the pension fund sector, has ventured into the cryptocurrency space by investing $20 million in a UK-based crypto derivatives platform, GFO-X. This investment is a segment of a larger $30 million Series B funding round that signifies a rebound in institutional trust in digital assets following the FTX collapse in the previous year.

The investment comes from M&G’s crossover strategy, which operates under its Prudential With-Profits Fund—a fund worth £129 billion. This move reflects M&G Investments’ progressive stance on digital assets and their potential within the financial marketplace.

GFO-X has strategically partnered with the London Stock Exchange Group, which owns a majority stake in LCH SA. They plan to leverage LCH’s new service, DigitalAssetClear, to facilitate the clearing of Bitcoin index futures and options that are traded on GFO-X’s platform. Although LCH DigitalAssetClear is still awaiting regulatory approval, both GFO-X and LCH anticipate the service going live by early 2024.

This investment is a significant indicator of changing perspectives towards cryptocurrency within institutional finance, especially considering the hesitancy following the high-profile failure of FTX. Such collapses led to substantial write-downs by traditional asset managers. However, M&G’s investment in GFO-X could mark the beginning of renewed institutional support for cryptoasset infrastructure.

The commitment by M&G showcases a forward-thinking approach, acknowledging the potential role of cryptocurrencies in the broader financial ecosystem and the importance of integrating digital asset infrastructure into traditional financial services.