Bitcoin Suisse Issues Digital Bond via the Obligate platform

Bitcoin Suisse, one of the largest digital asset players in the country, has issued a digital bond via the Obligate platform.

Bitcoin Suisse, reportedly the largest digital asset custodian in the country, has issued a digital bond via the Obligate platform. The issuer had planned to become a bank but shifted strategy after Bitcoin’s price rebounded last year.

The digital asset custodian had CHF 5 billion ($5.6bn) in assets under custody at the beginning of 2024. About 40% of those assets were part of its staking solution, which together with crypto trading contributed significantly towards its revenues. However, the company made a loss of CHF 13 million in 2023. It managed to recover that and more in the first quarter of 2024 with a profit of CHF 17.2 million.

We’ve requested more details about the bond but didn’t receive the information in time for publication. The bond is said to be over-collateralized to fund Bitcoin Suisse’s digital asset lending solution and the issuance is atomically settled using USDC as the settlement currency, with Circle as its backer.

“We are excited to support Bitcoin Suisse in their digital asset lending endeavors with Obligate’s fully digital and legally binding bond issuance solution,” said Stephan D. Meyer, Co-Founder and CLO at Obligate. “By facilitating this tokenized bond issuance, we empower institutional-grade brokers and custodians like Bitcoin Suisse, who custody billions in assets, to leverage our advanced blockchain technology, robust legal framework, and collateralization capabilities.”

Ten year old Bitcoin Suisse had planned to become a bank but abandoned that strategy when Bitcoin’s price rebounded last year. As a result of the strategic change, it has a new CEO, one of its co-founders, Andrej Majcen.

Meanwhile, Obligate (formerly FQX) has a tokenization solution for promissory note and bond issuance. The startup’s partners include Credit Suisse and SIX, the Swiss stock exchange group. Last year SIX also chose to invest in Obligate alongside stablecoin issuer Circle.

Obligate started out using Hyperledger Fabric for issuance but switched to public blockchains more than two years ago and now mainly uses Polygon POS.

In March Obligate hosted a bond issuance for Metavisio (Thomson Computing). It claims it was the first digital bond issuance for a public company that didn’t involve traditional banks. We note that Siemens issued a public blockchain bond without using a CSD. However, the Siemens bond was organized by German bank Hauck Aufhäuser Lampe Privatbank.