PV01 Capital Markets (TBL) STEP Application

PV01 Capital Markets (TBL) STEP Application

Applicant information

Name: PV01 Capital Markets Ltd

Address (Headquarters): Rosebank Centre, 5th Floor, 11 Bermudiana Road, Pembroke HM 08, Bermuda

Website: www.pv0.one

Primary contact Name: Sophia Shluger

Title: Chief Commercial Officer

Country: United Kingdom

Email, Telegram, Forum, & other methods of contact: sophia@pv0.one (TG: @shlugs)

Key Information:

Expected Yield: 5.26% APR for a 1 month T-Bill, 5.23% APR for a 3 month T-BIlls (as of 13th May 2024, net of fees).

Expected Maturity: Customizable; various maturities available (from 1 week to 12 months).

Underlying asset: United States Treasury Bills (individual bond issuance, down to a single CUSIP)

Minimum/Maximum transaction size: $100,000 / No maximum

Current AUM for product: ~$8mm

Current AUM for issuer: ~$8mm

Volume of transactions LTM: ~$18mm

Source of first-loss capital: Not applicable. Token holders have secured interest in the underlying T-Bill. There is no interest rate mismatch risk.

Basics and background


PV01 is building the next-generation platform for debt capital markets, offering access to institutional grade, yield-bearing and digitally native bonds on public blockchains. PV01’s non-custodial platform Pivio allows issuers and institutional investors access to the primary and secondary bond markets in a transparent and efficient manner.


PV01’s digital bonds are the world’s first blockchain native debt secured by assets in a bankruptcy-remote SPV under English law - the gold standard for bond issuance. Our stable RWA backed product, a digital bond represented by a fully transferable bearer ERC-20 token called a ‘TBL’ token, is collateralized (secured) by a direct, 1-for-1 exposure to a single, underlying US Treasury Bill having the same maturity and same face amount. TBLs are denominated in USDC, and issued on the Ethereum blockchain in bearer (dematerialised) form represented by the ERC-20 bond tokens.

  1. How will this investment improve Arbitrum’s RWA ecosystem?
  • Our product is a new “composable” primitive

Our TBLs are as proximate as possible on-chain with the fewest steps to owning a T-Bill in the fiat system. As modular, building block-like financial instruments, they can be reused to build other financial products on-chain.

As building blocks, they are easily transferable with very few restrictions. They have the potential to be used as collateral in CeFi and DeFi. Their non-rebasing form makes it easy to compose with other dApps.

  • Fit for corporate debt

The first iteration of PV01’s product are tokens representing US T-Bills. However, the legal structure lends itself naturally to corporate bond issuances. PV01 will soon issue corporate bonds directly on-chain for crypto companies. The crypto credit market exceeded $30bn at its peak and has the potential to be even bigger in this new cycle. Having the ability to invest in the debt of major crypto-native companies on-chain would increase the attractiveness of Arbitrum as a blockchain.

  • PV01’s Network

The team at PV01, having been operating in crypto as early as 2013 for some, has deep and personal connections with major exchanges and market makers, essential components of any new ecosystem. Market makers will deploy trading capital to Arbitrum should there be significant issuance of TBLs there. One large exchange is committed to accepting TBLs as collateral. Arbitrum will benefit from the cascading effect of involving volume-driven participants, not only TVL-driven participants. We believe that our institutional connections in the crypto market are second to none.

  • Putting Arbitrum ‘First’

PV01’s goal is to support Arbitrum in becoming the foremost RWA ecosystem, as measured by TVL, utility and activity. Our robust and well defined legal and contractual structure, as well as proven early issuances with major crypto institutions, ensure that we can scale both in size and velocity.

Together in partnership, we look forward to receiving feedback from users on Arbitrum and to make our product more relevant and valuable to users long term. Additionally, with our focus on corporate debt issuance beyond the current needs for Treasury products, we will be able to support Arbitrum-focused projects to raise debt capital themselves.

  1. Identify key management personnel and individual experience. Also include third parties utilized for managing assets and their qualifications.

PV01 has a proven leadership team with expertise in traditional capital markets and specifically in fixed income assets, including successful track records building businesses in the institutional digital assets market. Our executive team has diverse global experience from leading institutions such as Goldman Sachs, Deutsche Bank, Societe Generale, B2C2 and Amber Group.

Maxime Boonen, CEO and Co-Founder


Max is the co-founder of PV01. Founded in 2022, the company makes it possible to invest in government bonds directly from stablecoins. As a broker-dealer, PV01 arranges the issuance of digital bonds as tokens on public blockchains. Previously, Max co-founded B2C2, a pioneering firm that became the largest OTC dealer of the digital assets markets. B2C2 was acquired by Japanese banking group SBI in 2020. Before joining the nascent crypto industry in 2015, Max was an interest rates trader at Goldman Sachs.

Flavio Molendini, CTO and Co-Founder


Flavio is the co-founder of PV01 and B2C2. His expertise lies in building high-performance and scalable systems for trading and market making. Prior to PV01, he designed and implemented trading platforms now known for their speed, reliability, and predictability. Combining a deep understanding of IT architecture, financial markets and the blockchain technological stack, Flavio is here to give PV01 the systems it deserves.

Manuela Warnier, Chief Operating Officer


Manuela previously worked with Max and Flavio as B2C2’s Chief of Staff. Having joined the firm in early 2017, she helped to scale the company’s operations to over 100 people before joining an important crypto hedge fund. A self-directed and resourceful COO with 6+ years’ experience, she has successfully planned, managed and delivered diverse cross-functional projects. Manuela is an impactful networker and relationship builder with a growth mindset.

Jan Wipplinger, Head of Product


Prior to joining PV01, Jan worked for Deutsche Bank as a Managing Director in the Global Markets business where he held various senior roles covering debt capital markets, fixed income and emerging markets in London and Asia Pacific. His 20 years of experience spent in the depth of the bond market will help PV01 to combine time-tested financial thinking with innovative blockchain technology to create value in capital markets for our clients.

Sophia Shluger, Chief Commercial Officer


Prior to joining PV01, Sophia was Managing Director in Europe for Amber Group, a fintech unicorn and crypto native market maker. She was responsible for institutional expansion both in the UK and across EMEA. She is a Venture Partner at VNTR Capital, an investor syndicate, a financial services executive and a global business development professional with over 15 years of track record and deal-making experience from Goldman Sachs, XP, Santander Investment Securities and American Express, among others.

Kristi Green, Head of Legal


Kristi is a Canadian/UK qualified finance lawyer with extensive experience in both debt capital markets and structured finance. Kristi has been involved in advising issuers and sponsors on the local laws applicable to structured debt transactions conducted via offshore SPVs. Through her multi-jurisdictional career spanning Canada, France, the UK, Cayman Islands and Ireland, Kristi has gained exposure to securities regulations and capital markets practice across the UK, European and North American markets.

Michael Wynne, Chief Compliance Officer


Before joining PV01, Michael established a regulatory compliance service line at Walkers Global, a prominent offshore law firm. He successfully guided digital asset businesses through the regulatory licensing process, held several non-executive directorships and expanded the advisory business within the offshore market. His risk and compliance experience spans the UK, British Virgin Islands and Bermuda and he is a Fellow of the International Compliance Association. Michael is known for his practicality, risk mindset and ability to deliver.

  1. Describe any previous work by the entity or its officers/key contributors similar to that requested. References are encouraged.

PV01 obtained its DABA license from the Bermuda Monetary Authority (BMA) in February 2024. Since then, PV01 has successfully completed two issuances worth $5mn in value each, with the first transaction in 2Q24 led by PV01’s partners B2C2, Keyrock and BlockTower Capital who purchased a 5.24% APR yielding bond denominated in USDC.

PV01 is rapidly ramping up its issuance calendar and onboarding new institutional investors. The first transaction matured and was fully redeemed on April 16th, 2024. The second transaction is currently outstanding and will mature on May 16th, 2024. A third issuance will follow immediately thereafter. The offering memorandum and term sheets for the first issuance accompany this RFP.


Nicolas Priem, Managing Director and CIO at Tioga Capital
Thomas Klocanas, General Partner at BlockTower Capital
Thomas Restout, CEO at B2C2

  1. Has your entity or its officers/key contributors been subject to an enforcement action, criminal action, or defaulted on legal or financial obligations? Please describe the circumstances if so.


  1. Describe any conflicts of interest for your entity and key personnel.

No conflicts of interests to report.

  1. Insurance coverages, guarantees, and backstops Name of insurer or guarantor Per incident coverage Aggregate coverage

N/A. Investors have direct secured interest in the underlying US T-Bill.

  1. Historical tracking error in your proposed product, or similar to that being proposed Product 2024 YTD 2023 2022 2021


  1. Brief reason for above tracking error

Not applicable.

  1. Please describe any experience your firm has in working with decentralized organizational structures.

Our firm has experience working with DAOs and scoping out their Treasury management requirements, including fine tuning solutions for them. In previous roles, our team members have worked with AMMs and have actively participated in DAO events, including as the market maker for the biggest L1 launch of 2021. PV01 is committed to working with DAOs.

  1. What is your entity’s current assets under management, assets held in trust, total value locked, or equivalent metric for your legal structuring?

As of today, PV01 has approximately $8mm in TBLs after launching in April 2024. The underlying collateral is not actively managed.

  1. How many of these assets held are present on Arbitrum One, if any?

None today but the first issuance on Arbitrum One is taking place the week of 13 May.

Plan design

1.Please describe your proposed product, including a description of the underlying assets and, if more than one asset, the proposed allocation among assets and general investment guidelines. Where appropriate, include targeted maturity mix and credit quality. Attach supplementary documents as appropriate.

Our TBLs are structured as fixed dated debt, backed 1-for-1 by a single US Treasury Bill having the same maturity and aggregate principal amount. There is no reinvestment or management of the underlying collateral. We can issue TBLs based on investor requirements in terms of maturity, size and yield. We are able to issue TBLs matching any US T-Bill available in the market.

Importantly, this means that PV01 does not manage a pool of assets. It only provides direct exposure to individual US T-Bills in digital form.

In Arbitrum’s case, to efficiently and securely manage your Treasury holdings, we would suggest spreading multiple TBL token issuances across different maturities and sizes to fine tune your evolving liquidity and yield objectives.

For example an initial investment with a 1 month maturity, would yield approximately 5.26% APR (as of 13th of May, net of fees). Investments can be rolled over and compounded as they mature.

Please see attached a past term sheet to understand key details of the typical issuance.

Do investors have any shareholder, investor, creditor or similar rights?

The TBLs are debt instruments issued directly on–chain. They represent limited recourse debt claims against the SPV issuer. Unlike a fund product, they do not represent ownership or equity rights.

  1. Describe the legal and contractual structuring for your product including regulatory bodies overseeing your business and the product and identifying all legal jurisdictions interacting with your product. Attach supplementary documents as appropriate.

PV01 Capital Markets Ltd (PV01), a company incorporated under the laws of Bermuda with company number 202302581, acts as arranger of the TBL issuances.

PV01 is licensed by the Bermuda Monetary Authority under the Digital Asset Business Act 2018 of Bermuda to operate as a broker and dealer and digital asset services vendor in respect of digital tokens that represent debt claims.

PV01 is a 100%-owned subsidiary of HDL MF SA, a company incorporated in Belgium.

The Issuer, Digital Bonds Limited, was established in September 2023 and incorporated as an orphan special purpose vehicle in the form of a segregated accounts company (“SAC”) under the laws of Bermuda. The entire issued share capital of the Issuer is held by a Share Trustee on trust for charitable purposes. The Issuer’s sole business purpose and activity is the issuance of Digital Bonds and the purchase of collateral for such Digital Bonds through its segregated accounts (each acting as a separate issuer). Digital Bonds Limited is also regulated under the Digital Asset Business Act 2018 of Bermuda for the issuance of bond tokens.

The bonds are constituted under a Deed Poll entered into by the Issuer for the benefit of each investor in the TBLs from time to time, which includes provisions:

(i) constituting the Issuer’s obligations under the Digital Bonds;

(ii) providing for the issuance of the TBLs in bearer form issued via the smart contract on the blockchain;

(iii) providing for the Issuer’s obligations to be attached to the TBLs; and

(iv) governing title to and the rules of transfer of ownership of the bonds,

Accompanying this proposal by e-mail are the descriptions of the parties and of the Arranger Agreement, Arrangement and Tokenization Agreement, Brokerage and Custody Agreement, Security Deed and the Conditions of the bonds themselves as included in the Offering Memorandum (see the sections entitled “Transaction Parties and Transaction Documents” and “Terms and Conditions of the Digital Bonds”).

  1. Would Arbitrum’s assets be bankruptcy remote from your own entity and its officers/key contributors? If so, please explain the legal and contractual basis. On a confidential, non-reliance basis, provide any third party legal opinions to support the conclusions.

Yes, the SPV is structured as a fully bankruptcy remote entity. Arbitrum’s assets, like any investor’s, are protected from a PV01 bankruptcy due to the fact that:

  1. The digital bonds are limited recourse (other investors cannot claim on TBLs they do not own)
  2. Transaction documents include market-standard non-petition provisions
  3. The SPV’s shares are held on trust for charitable purposes by a licensed Trustee in Bermuda
  4. The SPV has no other business other than the issuance of digital bonds
  5. The SPV has no employees

The net proceeds of the issuance of the TBLs are applied by the Issuer toward the purchase of the underlying T-Bills to be deposited to the SPV’s account with the custodian and fully secured by a fixed security interest granted to the Security Agent for itself and for the benefit of the investors over, inter alia, the custody account and the underlying T-Bills.

We remain available to describe the legal framework in greater detail.

How are Arbitrum’s assets protected vis-a-vis the bankruptcy of the brokerage or applicable financial institution (e.g., bank deposit insurance, securities insurance, etc.)?

The underlying collateral securing each TBL issue is held in a segregated custody account with the custodian in compliance with the FCA’s CASS regulatory framework [Link] and are as such protected from a bankruptcy of the custodian.

Does the Issuer issue more than one asset? If so, what is the priority relationship between different asset classes?

No, each specific TBL is issued by a separate segregated account of the SPV (Digital Bonds Limited), which has no other business or liabilities. The segregated account company structure of the SPV ensures a statutory segregation of assets and liabilities among its segregated accounts acting as issuers. The TBLs of each issuance rank pari-passu amongst themselves.

  1. Provide a detailed cash flow diagram that shows the flow of funds from ARB/Fiat conversion, investment in underlying asset, payment of expenses, sale of underlying asset, and repayment (Fiat/ARB conversion), including the counterparties and legal jurisdictions involved.

The diagram also accompanies this proposal by e-mail.

Should the Foundation require ARB/USDC conversions, PV01 is onboarded with 2 major market makers based respectively in the Cayman Islands and Belgium.

  1. Describe anticipated tax consequences (if any) in transacting on the underlying and/or receipt of yield.

The tax treatment for each investor depends on their specific tax situation. All potential investors are advised to consult with their professional tax advisors as to the respective jurisdictional tax consequences of the purchase, ownership, disposition, lapse, exercise or redemption of the TBLs in light of their particular circumstances.

Payments under the TBLs are made without withholding or deduction.

  1. Describe the process and expected timeline for liquidation of assets, if given instructions to do so by Arbitrum governance.

The TBLs liquidate automatically upon maturity of the underlying T-Bill, without instructions from Arbitrum governance.

Prior to maturity, TBLs can be sold at any time through PV01 or other dedicated market makers at any time.

  1. What amount of first-loss equity will Sponsor provide to ensure over-collateralization, how is the first-loss equity denominated, and what is the source of capital?

As addressed above, there is no over-collateralization.

  1. Describe the liquidity and stability of the proposed underlying assets, including anticipated settlement times from the sale of the underlying to the repayment of ARB.

The US T-Bill market is vast, stable and liquid.

When the underlying US T-Bill redeems, the USD proceeds are converted into USDC and deposited into the smart contract for redemption by investors. Our experience is that the process takes place on the same day, within a few hours of market open in New York.

  1. If relying on the blockchain for any of the transactional flows, please describe any blockchain derived risks and mitigations.

The issuance and redemption processes are conducted through the smart contract. There are also on-chain payment flows from 1: the issuer’s digital wallet to Coinbase upon issuance and 2: from Coinbase to the smart contract upon redemption. General risks related to the smart contract and blockchain are set out in the Offering Memorandum. These risks are mitigated by the fact that the on-chain accounts / wallets including the smart contract itself are utilized on a flow through basis only so that funds sit in those on-chain accounts for short periods of time (no more than a few hours) and credentials are protected following industry best practices.

  1. Does the product rely on any derivative product (swaps,OTC agreements)?

No, the yield passes through directly from the underlying T-Bills to the investors at maturity.

  1. List all the third party counterparties linked to your assets including and not restricted to prime broker if any, custodian, reporting agent, banks for derivatives or loans and provide primary contact details for the third party counterparties
Type Name
Fiat On/Off Ramper Coinbase, Inc.
Broker and Custodian StoneX Financial Ltd.
Security Agent Ankura Trust Company, LLC
Arranger and Tokenizer PV01 Capital Markets Ltd.
Wallet Provider Fireblocks Ltd.

Contact details accompany this proposal by e-mail.

  1. Can you explain how is risk management (inv and operational) being done? Can you provide a copy of your risk management policy?

Our risk management policy accompanies this proposal by e-mail. PV01’s risk management methodology is supervised and assessed by the Bermuda Monetary Authority.

Due to the low-risk nature of the underlying T-Bills, the financial risk of PV01 is broadly limited to its own operating expenses. We focus particularly on operational risk (such as hacking or loss of keys). To mitigate such risks, we use industry best practices and the guidance of the Digital Asset Custody Code of Practice of the Bermuda Monetary Authority.

PV01 follows the Graphical Assessment of Activity and Network Technique (GAANT) approach to risk management. This method is used to visually represent and manage risks in a GAANT register.

Performance reporting

  1. What are your proposed performance benchmarks? If this is substantially different from the underlying assets, please explain why.

Each TBL is directly linked to a specific underlying US T-Bills. The performance of US T-Bills across different maturities can be tracked on Daily Treasury Bill Rates published by the Federal Reserve Bank.

The performance of the bond tokens is therefore exactly the same as the underlying T-Bill minus the product fee charged by PV01 (see below for details regarding the fee).

  1. Describe the content, format, preparation process, and cadence of performance reports. This should include proof of reserves, if appropriate. Please include a sample report.

Because our product is not a fund, the performance looks through to the underlying T-Bills. Interest rate yield curves are published daily by the U.S. Department of the Treasury.

Our custodian additionally generates a daily valuation report for each T-Bill. A sample report accompanies this proposal by e-mail.

  1. Who provides the performance reports in respect of the underlying assets?

As noted above, the issuer’s custodian provides statements of account in respect of the underlying T-Bills.

  1. Describe any formal audit process and timing of such audits.

The issuer makes monthly regulatory reporting of its assets to the Bermuda Monetary Authority. We expect to receive our first, annual third-party financial audit next year when due, in accordance with license requirements.


  1. Provide a copy of your standard contract, or one similar to what is being proposed here.

An Offering Memorandum underpins each bond token issuance, an example of which accompanies this proposal by e-mail.

Investors in new issuances agree to the Terms and Conditions of the bonds when they register their orders on the Pivio platform.

  1. Fee summary: Inclusive of the full scope of services requested. Product Fee schedule If asset based Fee calculation for our plan if asset based Annual fee if flat fee Any other fees (including redemption or minting fees)

Arbitrum’s product fee will amount to 20bps annualized and is included in the offer yield and offer price of each TBL.

The Arbitrum Foundation pays its own gas fees when it interacts with the smart contract.

:bulb: No other fees or expenses are borne by the investors.

  1. Describe frequency of fee payment and its position vis-a-vis payment priority compared with other expenses (i.e., cash waterfall)

The product fee is included in the offer price of the TBL, meaning that it is taken at inception. There are no other fees, ongoing or otherwise. All operating expenses of the issuer are borne and pre-funded by PV01.

Smart Contract/Architecture

  1. How many audits have you had and name of auditors? Please provide a copy of reports.

We have conducted one audit of our smart contract by Crypton. In summary, there were no open issues identified at the end of the audit. Please see a link here: Audits/PV01/Smart Contract Audit report - PV01 OnChain bonds - 11.01.2024.pdf at main · CryptonStudio/Audits · GitHub

  1. Is the project permissioned? If so how are you managing user identities? Any blacklisting/whitelisting features?

The permissioning is similar to that of USDC with regards to minting, burning and transferring.

Transfers are allowed except when the recipient is in a blacklist (maintained by Chainalysis) to prevent sending to known sanctioned addresses.

Minting and burning require the investor to be whitelisted, which corresponds to being KYC’d by the regulated entity. The Arbitrum Foundation would be one such investor.

  1. Is the product present on several chains? Are there any cross chain interactions?

The product is currently only present on Ethereum with ongoing work on multiple chains. We anticipate to have a first issuance on Arbitrum the week of 13 May.

  1. Are the RWA tokens being used in any other protocols? Please describe the various components of the ecosystem.

We anticipate to list bond tokens on the Curve AMM imminently. Being transferable and non-rebasing, the tokens can be used in any system that supports the ERC-20 interface (i.e. as collateral).

  1. How are trusted roles/admins managed in the system? Which aspects of the solution require trust from users?

Ownership of TBLs is trustless, they behave in a similar way as other ERC-20 tokens such as USDC.

Administration of the smart contract uses an admin key that is protected by Fireblocks. As a regulated entity, we follow the guidance of the Digital Asset Custody Code of Practice of the Bermuda Monetary Authority. Two out of four MPC approvals are required for blockchain operations.

The investment process into the underlying US T-bills is centralized and relies on human action. Investors must trust that the officers of PV01 will adequately convert USDC into USD and purchase the underlying T-Bills. Once purchased, the T-Bills are secured by the security agent for the benefit of the investors.

  1. Is there any custom logic required for your RWA token? If so please give any details.

TBLs are ERC-20 tokens, which are held in custody and transferred into any wallet.

Two additional functions are important during the lifecycle of each bond token:

  • a “claim” function to receive the final redemption payment at the maturity of the bond.
  • a “purchase” process at the creation of each bond to mint tokens.


  1. Please attach any further information or documents you feel would help the screening committee or ARB tokenholders make an informed decision.

Additional information and document shared by email to rwa@dao.arbitrum.foundation

  • Issuance Term Sheet
  • Risk Management Policy
  • Offering Memorandum (OM)
  • Product Cash Flow Diagram
  • Bermuda Monetary Authority Licenses for PV01 Capital Markets and Digital Bonds Limited
  • Two Legal Opinions (2)
  • Provider’s Contact Details
  • Custodian Daily Valuation report for the T-Bills
  • TBL Product Characteristics

Thank you for your attention :pray:
The PV01 Team