Bitpanda, a leading European cryptocurrency platform, has recently expanded its investment offerings by introducing security tokens for retail investors. This innovative asset class is designed to provide new opportunities for individuals looking to diversify their portfolios.
Introducing Steelcoin
The inaugural security token available on Bitpanda’s platform is Steelcoin, a project that originated in Vienna, Austria, in 2022. As detailed in the company’s press release from October 10, Steelcoin is characterized as a “regulated, transferable security” complying with the EU Prospectus Regulation. This token is specially designed to track the value of select steel products.
Understanding Security Tokens
Security tokens represent a groundbreaking asset class that digitizes traditional financial instruments like stocks, commodities, or bonds. These tokens are issued and traded on blockchain technology, allowing each token to signify ownership or rights associated with an underlying asset while benefiting from robust blockchain security. Due to their nature as digital securities, security tokens must adhere to stringent legal regulations and securities laws.
The Connection to Steel
Steelcoin is spearheaded by the Austrian steel trading group Frankstahl. Its subsidiary, SC STEELCOIN GmbH, has developed this token to represent a physical asset: precisely 1,721.28 kilograms of steel. By leveraging the Ethereum blockchain, Steelcoin emerges as a “transferable security under European law,” with its value directly tied to the prevailing market price of steel.
Value Sustainability Mechanism
To safeguard the long-term value and redeemability of Steelcoin, a gradual reduction of 3% per year will be applied to its weight. This mechanism accounts for potential risks and costs correlated with the underlying asset, steel, while ensuring that Steelcoin remains redeemable over time, even years into the future. Marcel Javor, CEO of Steelcoin, emphasizes the unique potential of steel as an investment, stating: “Steel is one of the most traded commodities worldwide, but unlike gold or iron ore, steel remains an underestimated investment opportunity. With Steelcoin, we are transforming steel into a digital asset and making it accessible to everyone.”
Bitpanda’s Expansion in the Investment Landscape
Incorporating security tokens into its offerings allows Bitpanda to facilitate portfolio diversification for investors through fractional ownership of varied assets such as real estate and commodities. The launch of Steelcoin is just the beginning, as Bitpanda plans to introduce additional security tokens in the future, further enriching its platform.
Strategic Partnerships and New Services
This year has been significant for Bitpanda, marked by the launch of Bitpanda Wealth in January. This cryptocurrency trading platform caters to the increasing demand for institutional crypto services in Europe, targeting high-net-worth individuals, family offices, external asset managers, and corporate treasuries. Eric Demuth, Bitpanda’s CEO, has expressed his enthusiasm about this launch, highlighting its intention to meet the unique needs of affluent clients.
Additionally, in June, Bitpanda formed a partnership with Deutsche Bank to facilitate real-time payments for German crypto traders. By utilizing Deutsche Bank’s API-based account solution, Bitpanda aims to streamline secure and efficient international transfers through access to German International Bank Account Numbers (IBANs).
International Growth and Technological Advancement
Bitpanda’s ambitions extend beyond Europe, as it seeks to spread its technological infrastructure, Bitpanda Technology Solutions (BTS), to various banks and cryptocurrency brokers. In August, BTS secured partnerships with the National Bank of Ras Al Khaimah (RAKBANK) in the UAE and Coinmotion, a Finnish crypto broker, effectively expanding Bitpanda’s technology reach into the MENA region and Scandinavia.
Through these developments, Bitpanda continues to position itself as a key player in the evolving cryptocurrency landscape, providing innovative solutions that democratize access to digital assets.