Sebastian Sinclair

<div id="highlights-block_620edea50be2c" class="highlights">
 <ul>
 <li>Crypto payments firm BCB Group has debuted its yield product aimed at professional investors</li>
 <li>Clients can choose to lock up either crypto or fiat for a 2% return when denominating in euros</li>
 </ul>
 
</div>



Crypto payments and trading firm BCB Group debuted its dual fiat and crypto yield product Monday in the EU, a day after BlockFi was forced to pay $100 million in fines to regulators over its lending product in the US.



The company said its BCB Yield product offers clients &#8220;multiple options&#8221; to earn a return on their balance via its BCB Securities Fund, according to a press release on Monday. The fund, BCB claims, is a &#8220;first of its kind&#8221; investment vehicle providing investment options on a range of currencies for up to 2% annual percentage yield when denominating in euros.



Lending products within crypto are hoping to fill the void left by low interest rate returns in traditional finance which have been pushed below or to near zero by centralized institutions aiming to buoy excessive inflation. As an alternative, crypto lending is seeking to lure investors in search of greater yields.



<blockquote class="wp-block-quote">&#8220;Corporate treasuries parked in cash or cash equivalents are getting a raw deal in most currencies,&#8221; Oliver Landsberg-Sadie told Blockworks in an interview on Thursday. &#8220;Crypto market dislocations between spot and futures continue to provide profit opportunities that only sophisticated traders are able to monetize.&#8221;</blockquote>



He said his company&#8217;s product offers a &#8220;market risk-neutral return&#8221; that draws upon arbitrage strategies executed by sophisticated traders in a way that also seeks to address counterparty credit risk that, while well established in traditional finance, was not widely understood or applied in crypto. 



&#8220;This is the only risk-neutral trade that can outperform true inflation in most currencies and is attracting great interest from those stuck in negative interest rate territory.&#8221;



Clients of the fund may choose to lend out in either fiat or crypto over a 30, 60 or 90 day period which are accompanied by corresponding notes resembling bonds, the company said. Returns can jump up to 8% when denominated in US dollars.



The investment vehicle provides multiple strategies for EUR, GBP, USD, CHF and crypto, according to the company&#8217;s <a href="https://www.bcbgroup.com/yield/" target="_blank" rel="noreferrer noopener">product page</a>. BCB said in its release its latest product marked the &#8220;first step&#8221; in a broader range of yield options that will be launching this year with a focus on solutions that leverage decentralized finance protocols and products.



<h3>Retail versus institutional lending in EU, North America</h3>



The launch of BCB&#8217;s lending product comes at a time when US regulators have been pushing for <a href="https://cms.blockworks.co/cftc-chair-asks-congress-for-greater-oversight-on-crypto-market/" target="_blank" rel="noreferrer noopener">greater oversight</a> of both crypto and accompanying lending products. 



Earlier this week, BlockFi paid $50 million to the Securities and Exchange Commission in addition to a further $50 million to state regulators over allegations it failed to register its <a href="https://cms.blockworks.co/crypto-lender-blockfi-to-pay-100m-in-fines-to-us-regulators/" target="_blank" rel="noreferrer noopener">high-interest securities</a> offered to retail clients.



Decisions over how to regulate crypto lending across the border in Canada fair marginally better as they fall under the purview of the country&#8217;s provinces, though the regulatory prerequisites for such products can only be achieved via <a href="https://cms.blockworks.co/is-a-regulatory-fight-over-crypto-lending-brewing-in-canada/" target="_blank" rel="noreferrer noopener">patience and time</a>, according to one local exchange.



But when it comes to the EU, BCB&#8217;s Chief Product Officer Chris Aruliah told Blockworks the company&#8217;s product differs significantly from BlockFi&#8217;s offering and uses a structure known as an Open-Ended Investment Scheme governed by Luxembourg securitization law.



<meta charset="utf-8">&#8220;This law governs how the fund operates and how the fund is structured,&#8221; said Aruliah. &#8220;Under the terms of the fund, the fund manager can use a number of agreed [legal] strategies to generate a return for investors.&#8221;



<blockquote class="wp-block-quote"><meta charset="utf-8">&#8220;The fund does not participate in the retail lending market like BlockFi&#8230;the nature of this product differs considerably to BlockFi and cannot really be compared,&#8221; he said.</blockquote>



The strategy utilized by BCB&#8217;s fund is based on allocations lent to &#8220;recognized&#8221; institutional firms within the crypto industry, Aruliah added.



Under the fund&#8217;s terms, investors and companies need to qualify for professional status and be able to post a minimum of 125,000 euros ($142,000), while passing necessary KYC and onboarding processes. The fund is only available to select European customers and is not available to US customers.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your email every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
 
Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from&nbsp;<a href="https://blockworks.co/newsletter/research" target="_blank" rel="noreferrer noopener">Blockworks Research&#8217;s Daily Debrief</a>.
 
Can&#8217;t wait? Get our news the fastest way possible.&nbsp;<a href="https://t.me/blockworks_news" target="_blank" rel="noreferrer noopener">Join us on Telegram</a> and follow us on <a href="https://news.google.com/publications/CAAqBwgKMPyTxgswn6_dAw" target="_blank" rel="noreferrer noopener">Google News</a>.
<hr class="wp-block-separator">

BCB Group Launches Yield Product in EU Amid Regulatory Scrutiny in US

Liz Coyne

In this video Blockworks&#8217; &#8220;<a href="https://youtube.com/playlist?list=PLvER9nHSRN3wZX2tI3JrCLOAzMBgUJtBo" target="_blank" rel="noreferrer noopener">Forward Guidance</a>&#8221; podcast host Jack Farley sat down with Oliver von Landsberg-Sadie, founder and CEO, BCB Group, at Blockworks <a href="https://cms.blockworks.co/events/das-london/" target="_blank" rel="noreferrer noopener">Digital Asset Summit in London</a> to talk about shifting the needle from fiat to crypto over the next 20 years.



Landsberg-Sadie has led a highly technical career in finance technology, forming a robust platform for solutions architecture and fintech innovation. He helped Merrill Lynch, Lehman Brothers, Barclays Investment Bank (2004-15) and Lloyds Commercial Bank bring a number of strategic and tactical projects to fruition as a hands-on SME in derivative instruments, regulations and technology.



After nearly 20 years in investment banking, Landsberg-Sadie founded BCB Group where his mission is to accelerate global adoption of digital assets as money, as ownership and as a commodity of value.



Watch the full interview below.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Shifting the Needle from Fiat to Crypto | BCB Group&#039;s Oliver von Landsberg-Sadie" width="1024" height="576" src="https://www.youtube.com/embed/Sfed2nj9FKc?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>

BCB Group Founder on Shifting the Needle from Fiat to Crypto

Sam Reynolds

<div id="highlights-block_6192e466f8324" class="highlights">
 <ul>
 <li>The relatively decentralized federalist system in the USA, which grants significant autonomy to the states, provides an inherently competitive system for market development, which in turn accelerates the adoption of crypto</li>
 <li>Compared to the US, inflation is much more tame in the UK, a macro factor which also inhibits the adoption of crypto</li>
 </ul>
 
</div>



Digital Asset Summit 2021, London — The UK is in the education phase of crypto adoption, where people are beginning to think of it as a legitimate asset class, but the structure of the nation’s government is holding back ambitious crypto entrepreneurs, panelists said during an event at Blockworks’ Digital Asset Summit in London. 



During a fireside chat between Peter McCormack, <a href="https://cms.blockworks.co/podcasts/what-bitcoin-did/" target="_blank" rel="noreferrer noopener">host of What Bitcoin Did</a>, and Oliver von Landsberg-Sadie, CEO of BCB Group, the two discussed how the US’ style of federalism and differences in macroeconomic factors is creating a gulf in crypto adoption between the two countries. 



“With the US federal system, states such as Wyoming, Florida and Texas have seen this as an opportunity to bring business into their states,” McCormack said, pointing out that many firms have migrated to these states. But, in the UK, the Bank of England’s position, according to McCormack, is that bitcoin is a “potential systemic risk.”



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="600" height="400" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg" alt="" class="wp-image-11215" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=600 600w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=80 80w" sizes="(max-width: 600px) 100vw, 600px" /><figcaption>Peter McCormack; Source: Ian Walton for Blockworks</figcaption></figure></div>



Brexit is also a weight on the industry in the UK, as banks need to focus on becoming re-licensed and compliant with EU rules and regulations. That’s a burden and inefficient, said the panelists, and also a missed opportunity argued McCormack, who would prefer to see the UK adopt crypto-friendly rules, to be a “leading beacon” for the world.



<blockquote class="wp-block-quote">“We are really behind the US here in ambition, investment, and education,” he said. “On every single measure we are behind, and it’s really depressing to see it,&#8221; said McCormack.</blockquote>



<h3>Macro differences driving adoption</h3>



BCB Group’s von Landsberg-Sadie pointed out that the differences in monetary policies between the US and UK, where money had been printed “far more freely”, is also accelerating crypto adoption on the western side of the Atlantic that doesn’t exist in the same way within the UK.&nbsp;



“The UK has been a little more steady handed in that space, as has the EU,” he said, arguing that if inflation jumps from 3.2% to 6.2% there will be significantly more capital accumulation in bitcoin.



<blockquote class="wp-block-quote">“The retail adoption of crypto in the US is an appropriate response to inflationary concerns.”</blockquote>



But that’s not to say there’s not a “massive appetite for non-US dollar crypto products,” von Landsberg-Sadie said.&nbsp;



As Bloomberg analyst <a href="https://cms.blockworks.co/bloomberg-analyst-bitcoin-is-a-dollar-complement/" target="_blank" rel="noreferrer noopener">Mike McGlone wrote in an April note</a>, crypto enhances the dollar’s dominance in the world because the vast majority of stablecoins are dollar-denominated.



However, to get to that point in the UK and Europe, there still needs to be a “massive catch-up”, von Landsberg-Sadie said.



There’s no lack of factors to drive change, however, as von Landsberg-Sadie explained that the next major capital event will be when there’s a UK-approved treasury management system that allows for the “super juicy returns from DeFi” to be brought into the TradFi world on corporate treasury balance sheets. 



But perhaps that is only possible if the UK can catch up in crypto adoption first.



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening. <a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a> now.



<hr class="wp-block-separator"/>