A Bermudian-based digital assets service provider is to play a key role in the evolution of block chain-enabled financial innovation and investment opportunities.

Zurich-based Obligate, an on-chain capital markets platform, has launched a structured product – Barrier Reverse Convertible – linked to Bitcoin.

Issued as an eNote, Obligate's trademarked digital security, the company said this development ushers in a new chapter for on-chain investments, leveraging the flexibility and potential of digital assets.

STS Digital Ltd, which is licensed and regulated by the Bermuda Monetary Authority, is the first to issue through this novel way, setting a precedent for the issuance and distribution of structured investment products on the block chain, Obligate said.

For the first time, the company added, investors can access customised investment products issued natively on-chain.

It said the products issued on the Polygon block chain can provide exposure to a wide variety of assets combined with bespoke pay off profiles that were previously not available as an investment solution to investors looking to deploy their digital assets.

The company added that higher levels of transparency, automation, and efficiency can be achieved by replicating the product mechanics using Obligate's smart contract-based platform.

"As we continue to evolve the financial sector, Obligate is excited to partner with STS Digital Ltd, combining our technological leadership with their trading expertise," said Tobias Wohlfarth, head of origination at Obligate.

"This partnership is set to redefine the investment possibilities available to investors on-chain, aligning perfectly with our vision of pioneering a regulated and decentralised financial future."

Obligate said the partnership will establish an extensive product suite alongside a broad spectrum of digital asset services, showcasing the wide-ranging competencies of both entities.

Gideon Hyams, cofounder of STS Digital Ltd, said: "Our partnership with Obligate allows us to bring structured products on-chain and make the product life-cycle fast and cost efficient.

“Our expertise in derivatives allows us to transform high volatility from digital assets into attractive coupons and payouts."

In the future, Obligate and STS Digital said they will offer, among other services, tailor-made investment products based on client requests alongside monthly highlight products with the second product already in subscription.

STS is licensed by the BMA under the Digital Asset Business Act 2018 as a Class T digital asset business, providing a suite of services including operation of a digital asset exchange, custodial wallet services, digital asset derivative exchange provision and digital asset services vending.