BitMEX is Planning to Issue the First Zero Coupon Bitcoin Bond
BitMEX, the largest Bitcoin margin trading platform, is planning to become the major player in the Bitcoin fix income market. This market has enormous growth potential and the most reputable crypto exchanges, miners, and other market participants that generate revenues in Bitcoin will most likely be issuing Bitcoin debt instruments in the future. Those institutions have well established reputation and more inclined to pay back Bitcoins unlike retail borrowers on lending platforms.
BitMEX considers issuing a 30-days Bitcoin zero-coupon bond. The more accurate definition of this debt instrument is a commercial paper, which is typically issued by large banks or corporations in the traditional financial system to meet short-term financial obligations. Other corporations, financial institutions, and money market funds are usually buyers of commercial paper.
Commercial paper is an unsecured, short-term debt instrument that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the paper is redeemed for its full face value. Yields on commercial paper vary according to the credit worthiness of the issuer.
For example, a 30-days Bitcoin zero-coupon bond issued by BitMEX with the face value of 10 Bitcoins could be offered for 9.9 Bitcoins, providing 1% interest yield. The exact rate would be determined based on the BitMEX financial position and prevailing market interest rates.
Based on material provided by BBSB website.
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