Capital B, a bitcoin treasury firm based in France and listed on Euronext Growth Paris, is actively developing a new digital credit instrument tailored for the European market. Alexandre Laizet, a board director at the company, revealed that the product will be modeled after existing successful instruments like Strategy’s STRC and Strive’s SATA, utilizing the company’s substantial bitcoin holdings as the underlying asset.
- Capital B is launching a bitcoin-backed digital credit instrument for Europe.
- The instrument aims to offer double-digit yields with low volatility.
- The company cites Europe’s high taxes and outdated regulations as reasons for developing such a product.
- Capital B currently holds 3,139 BTC in its treasury.
- The firm anticipates substantial investor interest, citing a tenfold increase in inquiries.
- Risks include bitcoin devaluation and counterparty risk, though Capital B emphasizes its use of regulated banking partners.
- Capital B aims to hold 1% of Bitcoin’s total supply by 2033.
Laizet stated that the primary objective of this new financial product is to address what he described as a European market “crippled by high taxes, crippled security issues, and old, unadapted regulations for the digital era.” By providing a “digital credit instrument adapted to Europe,” Capital B intends to significantly alter the existing market dynamics.
The proposed instrument is designed to deliver yields exceeding 10% while maintaining volatility below 10%, leveraging Capital B’s bitcoin treasury, which currently stands at 3,139 BTC. Laizet expressed confidence in the ability of bitcoin treasury companies to generate such returns amidst global monetary devaluation, contrasting it with the long-term cash flow generation required in traditional finance. He highlighted bitcoin’s inherent appreciation, noting that its value growth can sustain these yields, citing Strategy’s recent operations where dividend payments were made from bitcoin sales, followed by significant new BTC acquisitions.
Capital B has observed a substantial increase in investor interest in digital credit products, reporting a tenfold rise in inquiries compared to the previous year. Laizet acknowledged the inherent risks associated with such instruments, including potential bitcoin devaluation and counterparty risk. However, he downplayed the probability of bitcoin’s value collapsing to zero and emphasized Capital B’s commitment to mitigating execution and custody risks by partnering exclusively with regulated banks and employing a team of experts in capital markets, banking, technology, and corporate finance. Specific details regarding the launch timeline were not provided.
Capital B positions itself as Europe’s first and largest bitcoin treasury company, supported by prominent investors in the bitcoin ecosystem. The company’s strategic objectives include accumulating 1% of Bitcoin’s total supply by 2033 and reaching 15,000 BTC holdings by the end of 2027.
Potential Regulatory Precedent
The development and potential launch of Capital B’s digital credit instrument represent a significant step in the evolution of regulated financial products backed by digital assets in Europe. If successful, this initiative could establish a new precedent for how treasury companies leverage their cryptocurrency holdings to offer sophisticated financial instruments within the existing regulatory frameworks. The company’s focus on regulatory compliance, as stated by Laizet, and its engagement with traditional financial infrastructure, such as regulated banks, suggest a strategic effort to align with or operate within established legal boundaries. This approach may pave the way for similar products from other European crypto firms, provided they can navigate the complexities of securities laws, consumer protection regulations, and the specific requirements of digital asset custody and issuance. The success of such instruments could influence future regulatory discussions, particularly concerning the integration of digital assets into mainstream financial markets and the establishment of clear guidelines for digital credit and yield-generating products.
Information compiled from materials : www.theblock.co