Bitpanda Offers EU-Regulated Security Token To Retail Investors

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Veronika Rinecker

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Veronika Rinecker

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Veronika Rinecker is based in Germany, studied international journalism and media management. She specializes in politics and regulation, energy, blockchain, and fintech. Since 2017, she has been...

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October 10, 2024 12:30 EDT

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Bitpanda, a European cryptocurrency platform, has introduced security tokens as a new investment opportunity for its retail investors.

The first security token available on the Bitpanda platform is Steelcoin, which was founded in Vienna, Austria, in 2022.

According to the company’s press release from Oct. 10 shared with CryptoNews, Steelcoin is a “regulated, transferable security” under the EU Prospectus Regulation, tracking the value of selected steel products.

The countdown is over and @steelcointoken is officially live on Bitpanda!

Steelcoin aka $STEEL is a security token, the first of its kind on Bitpanda and enables investors to participate in the development of certain steel prices.

Steelcoin is a transferable bearer security… pic.twitter.com/50abJGwoB9

— Bitpanda (@Bitpanda_global) October 10, 2024

Steel on the Ethereum Blockchain

Security tokens represent a new asset class that digitizes traditional financial assets like stocks, commodities, or bonds, and are issued and traded on a blockchain. Each token represents ownership or rights in an underlying asset and is protected by the security mechanisms of blockchain technology. As security tokens are classified as digital securities, they are subject to strict legal regulations and securities laws.

According to the press release, the launch of Steelcoin aligns with Bitpanda’s long-standing vision to provide a platform for innovative crypto projects. As early as 2019, the company expressed its intention to create a “launchpad” where projects could raise funds through Initial Exchange Offerings (IEOs).

Steelcoin itself is a project from Austrian steel trading group Frankstahl. Its subsidiary, SC STEELCOIN GmbH, developed a token that represents a tangible asset: 1,721.28 kilograms of steel. This approach makes Steelcoin a “transferable security under European law” on the Ethereum blockchain with its value directly linked to the price of steel.

To ensure the long-term value and redeemability of Steelcoin, its weight is subject to a gradual reduction of 3% per year. This built-in mechanism helps to account for potential risks and costs associated with the underlying asset, steel. By maintaining a sustainable weight, Steelcoin can be redeemed at any time, even far into the future.

Marcel Javor, CEO of Steelcoin, adds:

“Steel is one of the most traded commodities worldwide, but unlike gold or iron ore, steel remains an underestimated investment opportunity. With Steelcoin, we are transforming steel into a digital asset and making it accessible to everyone.”

Bitpanda’s Global Growth

With the launch of security tokens on its platform, Bitpanda allows investors to diversify their portfolios with fractional ownership of assets such as real estate and commodities.

In addition, Bitpanda’s B2B partners can now offer their clients access to this asset class, as Steelcoin is just the first of many security tokens to be listed on the platform in the future, according to Bitpanda.

Earlier this year, in January, Bitpanda also launched Bitpanda Wealth, a cryptocurrency trading platform designed to meet the growing demand for institutional crypto services in Europe and target high-net-worth individuals, family offices, external asset managers, and corporate treasuries.

I've been looking forward to this product for a long time, so I'm very happy that @Bitpanda_global is launching 'Bitpanda Wealth'. Our latest service is specially designed for HNWIs, Family Offices, External Asset Managers, and Corporate Treasuries. It marks our next step in… pic.twitter.com/WG0KwTd1r7

— Eric Demuth (@eric_demuth) January 30, 2024

In June, Bitpanda partnered with Deutsche Bank to enable real-time inbound and outbound payments for German crypto traders. By leveraging Deutsche Bank’s API-based account solution, Bitpanda will gain access to German International Bank Account Numbers (IBANs), facilitating secure and swift international transfers.

Bitpanda expands its reach beyond Europe. The company is offering its cloud-based infrastructure, Bitpanda Technology Solutions (BTS), to other banks and cryptocurrency brokers. In August, BTS partnered with the National Bank of Ras Al Khaimah (RAKBANK) in the United Arab Emirates and Coinmotion, a crypto broker in Finland, bringing Bitpanda’s technology to the MENA region and Scandinavia.