The Australian Securities Exchange (ASX) announced on Wednesday that bitcoin will be used to buy a stake in a company listed on its exchange. Blockchain Global Limited (BGL) has agreed to buy a 40% interest in Digitalx, paying partly in bitcoins.
Also read: Bitcoin Double Taxation Ends in Australia July 1st
The First Case of Bitcoin Strategic Investment on ASX
According to an announcement by the ASX, bitcoin will be used in a strategic investment on the exchange for the first time. The exchange wrote:
First tranche funding through bitcoin – a first for the Australian Securities Exchange.
Founded in 2014 and formerly known as Bitcoin Group Limited, BGL provides Bitcoin mining, software, and consultancy services involving blockchain technology. The company has agreed to invest AUD$4.35 million at 2.7 cents per share to acquire roughly a 40% interest in Digitalx on a fully diluted basis.
This investment is subject to shareholder approval and due diligence which would be done by June 30. If the shareholder approval is not obtained, Digitalx has agreed to pay BGL a break free penalty of AUD$100,000.
Previous Deal Between BGL and Digitalx
BGL operates ACX.io which is Australia’s largest and most liquid bitcoin exchange by volume. According to the company’s CEO Sam Lee earlier this year, the exchange has 60 percent market share of the total bitcoin market trade volume in the country.
In February, BGL entered into a revenue sharing agreement with Digitalx to onboard customers of Digitalx Direct bitcoin exchange onto ACX.io. In return, Digitalx would receive 50% of all revenue generated from customers introduced to the ACX.io.
Australia Warming up to Bitcoin
“Currently, consumers who use digital currencies can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST,” the budget explains. Citing “the Government will make it easier for new innovative digital currency businesses to operate in Australia,” the budget details:
From 1 July 2017, purchases of digital currency will no longer be subject to the GST, allowing digital currencies to be treated just like money for GST purposes.
Do you think more companies will buy stakes in other companies using bitcoin? Let us know in the comments section below.
Images courtesy of Shutterstock, Blockchain Global, and Digitalx
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