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SGSS launches cryptocurrency service

Cryptocurrencies1Societe Generale Securities Services (SGSS) has launched what it claims is the first large-scale cryptocurrency offering from a European asset servicer.

The French firm will provide depository, valuation and liability services to asset managers looking to include cryptocurrencies within their funds.

The first client, French firm Arquant Capital, has been onboarded and SGSS hopes to add more clients before the year-end. Arquant is set to launch a number of actively managed professional funds licensed by the French regulator AMF and invested in bitcoin, ether and derivatives.

SGSS already has a digital assets subsidiary, SG Forge, but Yvan Mirochnikoff, head of digital solutions at SGSS, told FundsTech that the two offerings are complementary with SG Forge providing issuing and trading services for digital assets while the latest service is essentially an extension of the traditional asset servicing offering to cover cryptocurrencies.

“This is not a change in strategy for SGSS,” said Mirochnikoff. “We have been working with digital assets for some time and this is an extension of our traditional offering to cover a new asset class.”

Importantly, it also provides a full range of digital asset services via one provider, said Mirochnikoff.

The launch comes at a time when cryptocurrencies have experienced sharp declines in valuations although Mirochnikoff believes from an asset servicing perspective there is still strong demand from institutional investors.

There is also a rapidly evolving regulatory framework for digital assets and cryptocurrencies with different countries at different levels of maturity. Consequently, the service will initially have a domestic focus, although Mirochnikoff hopes that it can expand across the European market in time. “For the moment, we have to act locally but we hope that in three years’ time, there will be EU-wide regulations.”

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