CABS & BNT Manifesto: Securitising Crypto
We are now beginning to see the blockchain ecosystem give rise to new monetary systems that can be issued at little or no cost.
As Gaila Benartzi, the founder of Bancor, said: “When technical barriers are lowered and the liquidity problem is solved, the emergence of the user-generated-currency long tail may be the greatest long tail in internet history.”
CyberTrust believes that the incoming technological paradigm will allow any community around the world to issue and distribute a “digital store of value”, which will provide greater economic abundance.
Crypto securitisation and Bancor synergy
Welcome Crypto Notes, a new product for institutional investors. CyberTrust provides a crypto securitisation platform that pools cryptocurrencies into securities, creating a “container of value” for institutional investors.
CyberTrust Asset-Backed Securities’ (CABS) integration with Bancor should inject new institutional liquidity into BTC, ETH and BNT ecosystems. As a liquidity platform for long tail tokens, BNT is as an ideal candidate with which to form a partnership and create an effective distribution channel for the upcoming token revolution.
CyberTrust will allocate 2.5% of all funds raised to purchase BNT tokens, which will be up to $10 million USD equivalent, if hard cap is reached. The purchase of BNT will take place within 30 days of the CABS’ token sale closing, which is scheduled for 6 November , 2017, 09:00 GMT, or when the hard cap is reached.
Where is the liquidity?
Most of the money in the world is concentrated in the hands of “institutional investors”. These are hedge funds, family offices of the richest families, plus sovereign wealth funds, pension funds, insurance companies, large banks and other financial intermediaries.
Some of them believe in the great potential of the blockchain revolution, but when they decide to invest into crypto, how do they currently invest? At the moment, the only place that provides the opportunity to invest in cryptocurrency is the Bitcoin Investment Trust (BIT). It has a $1.4 billion USD market cap, is a closed end fund run by Grayscale, which is part of the Digital Currency Group.
Currently Credit Suisse and Wedbush Securities are raising an additional $1 billion USD of new capital for BIT.
So how much do they pay?
The Bitcoin Investment Trust only holds BTC. Each BTC equates to a 10 BIT share. As of market close on 22/09/2017, the market price per BTC inside the fund was $6,000 USD.
However, BTC with the same time stamp at BitFinex was priced around $3,500 USD.
Why do they pay so much?
They pay for the following features that raw BTC simply does not have as “a container of value”:
- Titled & auditable ownership, meaning auditing can demonstrate the chain of end-customer ownership since the date each specific Bitcoin was purchased by BIT to the the present day.
- Usable clearing and settlement systems with manageable risk.
- Judicial recovery and enforcement with regulatory oversight.
Why don’t they simply open a wallet?
These are large organisations that require regulatory compliant auditing and accounting. They require traditional titled rights, usable clearing systems, in addition to a regulator and judicial system(s) which are able to mediate concerns. As institutional investors have fiduciary duties to their clients and reporting rules for regulators, they can not simply open a wallet or invest via a crypto offshore account because of the counterparty risks involved.
Wouldn’t the premium disappear?
We believe that the price of BTC will reach $6,000–10,000 USD. BIT’s price is a good proxy estimate for the price of BTC when institutional investors move into the market.
Theoretically speaking, a premium should exist as new features are added to securitised BTC which were not previously present, i.e. judicial enforcement, Clearstream clearing, ISIN, and cyber security.
How do we differ from Bitcoin Investment Trust?
Our solution is similar to that of the Bitcoin Investment Trust, but with several key advantages. Firstly, BIT is based in the United States, whilst we are based in Luxembourg and are therefore able to provide a “pass-through tax” structure. But more importantly, we are creating CABS token to fuel securitisation.
CABS tokens provide access to use our open securitisation platform, whilst owning these tokens gives you the ability to securitise BTC, ETH or BCH and sell it to institutional investors.This represents an outstanding arbitrage opportunity and it should be noted that currently no other such vehicles for ETH and BCH exist.
Put another way, CABS tokens are a proxy for a crypto securitisation premium.
What makes CABS an innovation?
We are an open securitisation platform, fueled by the CABS token. This allows the community to participate in the creation of new crypto derivative products on our platform. We are currently developing the following use cases with hedge and sovereign wealth funds: T-Bills in BTC terms or Amazon Stock in ETH terms, in addition to 2x Long or 3x Short ETFs.
CyberTrust developed crypto securitisation standards in Luxembourg. We see crypto derivatives as a bridge between traditional and crypto markets.
How many CABS will be created?
The hard cap is set at 1.3 million CABS, of which: one million (1,000,000) will be sold to investors; two hundred thousand (200,000) will be allocated to the team, advisors, investors and service providers; with the remaining one hundred thousand (100,000) will be used as working capital to fund the securitisation pools.
What is the price of CABS?
The ICO price for CABS will be set at a 85% discount to the BIT premium, as of 25 September 2017.
When is the launch?
The first BTC securitisation pools will be launched in Q1 2018.
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You can also visit https://www.cybertrust.io to get a copy of the white paper and learn more about CyberTrust.