British businessman and Financier Richard O’Dell Poulden hopes that his new venture will relieve the plight of an underserved cohort: Bitcoin billionaires looking to buy homes.
In October, Poulden’s Gibraltar-based company Valereum — at the time called Valereum Blockchain —announced the plan to buy 80% shares of the Gibraltar Stock Exchange (GSX), to create an integrated exchange where common stocks and financial products can be traded for cryptocurrencies. If Gibral Artificial’s financial regulator approves the deal, it will make the British overseas territory, also known as “The Rock”, home to the world’s first stock exchange. And, Poulden said, will ultimately help crypto millionaires squeeze more money out of their tokens.
Long seen as a tax haven, over the past few years, Gibraltar has worked to rehabilitate itself as a global blockchain and cryptocurrency hub, approving a regulatory framework for crypto businesses looking to have headquarters in this territory. Poulden said that enabling financial transactions in crypto would solve a big problem for people who hold large crypto savings but have trouble monetizing them. Converting cryptocurrencies into state-issued currency on an exchange usually means incurring costs such as transaction fees and capital gains taxes; and trying to use it as collateral to buy assets for example is difficult – requires huge collateralization due to the tendency of cryptocurrencies to fluctuate wildly (ask those with a Bitcoin vault) 23% decrease in value since the beginning of the year). Even if Emerging companies like Milo are based in Miami say they can change that, and Wall Street banks are said to be Currently, the conditions for securing crypto-backed loans are “not very attractive,” Poulden said.
Valereum’s plan “makes crypto a more attractive asset,” Poulden said, “because you can put some of your savings into a fiat security, you can borrow and buy a home.” home.”
According to Valereum chief executive Patrick Lyle Young, if the company succeeds in acquiring GSX, the exchange will operate like a normal stock exchange, with the only exception that transactions may be liquidated. Pay in cryptocurrencies instead of just fiat. People will be able to exchange cryptocurrencies for shares, which will be held in a trust company owned by the exchange. (In December 2021, Valereum buys Juno, a Gibraltar company that specializes in setting up trust companies.) These shares, which can be of any company, can then be used as assets. collateral for other financial activities, such as bank loans. In a word, it’s like exchanging collectible cards — everyone leaves happily and the middleman gets nothing. That way, Young said, the transaction would appear like a purchase of cryptocurrency and would not require the cryptocurrency to be converted to fiat. “The last one [Bitcoin holders] want to do is sell, because if they sell crypto, they will have [capital gains] tax bill,” he said. “If they spend crypto to buy another asset with crypto, they are not responsible for that tax.” But since they will have access to shares in the trust, they can, for example, use them as collateral.
Valereum’s initial announcement of its plans to acquire GSX mentioned Bitcoin, Dogecoin, Cardano, Ethereum, and Tether among the cryptocurrencies that would be approved for exchange trading, although Young said the listing The final book is still being calculated.
