Brave New Coin Eyes Structured Products

Brave New Coin (BNC), a digital asset trading, research, and data company headquartered in New Zealand, is looking to expand its structured income products offering.

Fran Strajnar, CEO and founder of BNC, says idea of decentralized finance—the recreation of traditional financial instruments in a decentralized architecture—has been getting a lot of attention in the past few years, and the company wanted to capitalize on that. The rise of decentralized finance has led exchanges like Deutsche Börse to consider a network operator role in the distributed ledger environment. 

“We figured out that, with the technology we’ve built and the infrastructure available in the industry, we’re capable of creating structured income products that churn out a very attractive yield,” Strajnar says, adding that these products would be 100% liquid and instantly redeemable.

“Name one hedge fund that does instant redemption—that just doesn’t exist. And they’re self-custodied, so any corporate treasury or any hedge fund or any asset manager looking for steady income can essentially participate. And then at any time without having to call us, they can yank out the capital and earnings-to-date for instant redemption,” he adds.

Strajnar says that BNC has released the initial version of what he calls a “yield-bearing” structured-income product. BNC aims to have a principal-protected structured-income product by mid-September. It also has plans to launch a publicly-listed crypto exchange-traded fund (ETF) in September. Strajnar says BNC is finalizing the contract with an undisclosed asset manager and sponsors of the ETF.

“It’ll be cross-listed on a range of different exchanges, and the methodology will be licensed and replicated so that the rest of the product can permeate to Asia, Europe, and so forth. That’s exciting, it’s the entire reason I started my company in the first place—I wanted to build the index that will power the first proper crypto ETF,” he says. 

However, BNC’s immediate focus is on delivering the five products it is building for the Toronto Futures Options Swaps Exchange (tFOSE). The two parties recently signed a multi-year deal that will see BNC providing tFOSE, a new Canadian-based derivatives exchange and clearinghouse, with cryptocurrency indices. 

tFOSE is currently seeking regulatory approval in Canada, but plans to launch cryptocurrency cash-settled options trading in 2021. 

BNC will design, calculate, and administer five cryptocurrency indices to power cash-settled options trading on tFOSE. The indices will allow tFOSE’s clients based in Canada and globally to trade crypto derivatives on a fully-regulated Canadian exchange, once it receives regulatory approvals. 

The indices will be available for production in the third quarter of this year, beginning with the tFOSE BNC Litecoin Index.

BNC was founded in 2014. Strajnar says its goal is to build institutional-grade products and services for the crypto asset class. It currently provides data solutions to companies like Nasdaq, TP Icap, and Dow Jones Factiva.