Abrdn buys stake in digital assets exchange in crypto push

‘Blockchain technologies are inevitably going to form a big part of the future of financial markets,’ says CEO Bird

Stephen Bird abrdn
Stephen Bird

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Abrdn has become the latest asset manager to wade into the cryptocurrency market as it purchases a stake in Archax, a digital assets exchange.

Archax, which launches later this year, allows institutional investors to access blockchain-based digital assets. It is the only exchange to win approval from the Financial Conduct Authority.

Abrdn is now Archax’s largest external shareholder, with its significant holding entitling it to a seat on the board, according to the Financial Times. The £508bn fund manager has made a concerted push to enhance its digital capabilities, buying Finimize and a stake in wealthtech platform Nucoro, but this marks its first foray into the cryptocurrency space.

This year, digital coins, including mainstream favourites like Bitcoin and Ethereum, have seen their prices collapse amid the global stockmarket sell-off, driven by rising rates and fears of an economic slowdown.

Yet some of the largest global asset managers have been trying to get a toehold in the digital assets market. In the past week, Blackrock has launched a spot bitcoin private trust and partnered up with Coinbase to give institutional clients on its Aladdin platform access to the crypto exchange.

Meanwhile, Schroders has taken a “strategic minority stake” in blockchain technology and digital assets-focused asset manager Forteus.

Abrdn said its partnership with Archax will allow investors a route to access new opportunities through digital securities and would help “facilitate a shift towards greater operating efficiencies” through the adoption of blockchain technologies.

“Blockchain technologies are inevitably going to form a big part of the future of financial markets,” CEO Stephen Bird (pictured) said. “There is the potential to offer greater transparency, greater speed and less trading friction by using these nascent digital technologies.

“Archax is one of the most promising UK players in this next expected high growth area in finance – the use of digital and tokenised securities with same-day settlement. In that sense, the growth of the digital investment market is about much more than cryptocurrencies.
“With Archax, we will have a meaningful footprint in this fast-developing market – which is likely to evolve in a multitude of different ways that are relevant to our core businesses. This investment not only provides an opportunity for substantial financial benefits, it also creates a partnership with some of the leading thinkers in an area that has the potential to play a substantial role in the future of finance.”
Abrdn swung to a £320m loss for the first six months of 2022, with fee-based revenue falling 8% as its assets under management tumbled by £34bn.

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