Overstock.com, Inc., the e-commerce retailer, became the first company to solicit qualified institutional buyers in a digital corporate bond that will trade using the bitcoin block chain. This development is part of Overstock’s larger cryptofinance initiative known as Medici.
“The cryptorevolution has arrived on Wall Street,” said Overstock.com CEO Patrick M. Byrne. “We’re making it official by offering the world’s first ‘cryptosecurity.’”
Byrne defined a cryptosecurity as a security that trades on a cryptographically-protected distributed ledger. Cryptosecurity buyers will be able to track their ownership on the bitcoin block chain.
Overstock will issue the cryptosecurities using its TØ.com technology. The name TØ.com refers to the fact that trades on the system securely settle the same day, as opposed to three days later, which Wall Street traders refer to as “T+3.” The TØ.com technology uses the Open Assets protocol.
Issuing the TIGRcub bonds on the TØ.com platform proves that cryptotechnology can facilitate transparent and secure access to capital by emerging companies, Byrne said. A circular informing investors of the cryptobond offering was distributed on June 1, 2015.
This offering is being made to qualified institutional buyers that meet the definition of “accredited investor” in compliance with Rule 506(c) of Regulation D under the Securities Act of 1933, as amended.
In a keynote address at Inside Bitcoins Las Vegas last year, Byrne announced a partnership with Counterparty on a project code-named Medici, a front-end portal to the decentralized stock exchange of the Counterparty platform, CCN.com reported. Counterparty is a peer-to-peer financial platform built on top of the bitcoin block chain. Medici’s goal is to build a cutting-edge stock market on top of the bitcoin block chain, and help bitcoin do for Wall Street what it has already begun to do for payments.
Salt Lake City, Utah-based Overstock.com began accepting bitcoin as a purchase payment option in January 2014 and is the largest retailer that accepts bitcoin.
Overstock sells a broad range of products at low prices including furniture, rugs, bedding, electronics, clothing, and jewelry. Worldstock.com is a fair trade department dedicated to selling artisan-crafted products from around the world whereas Main Street Revolution supports small businesses across the U.S. by providing them a national customer base. Overstock has additional community-focused initiatives such as a Farmers Market and pet adoption service.