These days, the mention of blockchain-based assets in the real world (RWAs) evokes traditional financing institutions such as Blackrock presiding billions of dollars in tokenized money market funds.
But the original promise of crypto was about opening up financing options for someone. It is Ethos BitFinex Securities with its latest tokenized equity issuance: Two alternative financing products in the UK, one focused on community bank debt, the other on litigation regarding claims for abused car financing.
BitFinex Securities ‘Titan1’ product announced on Wednesday awards 5 million British pounds ($ 6.8 million) for subordinate debt issued by Castle Community Bank, supporting loans to financially excluded customers in Edinburgh, Scotland.
This alternative debt product will give investors a 20% yield per year (net fees net), which will be paid quarterly for up to 10 years with non-current provisions for the first 5 years, according to a press release.
The second structure, “Titan2”, will invest 100 million British pounds ($ 136 million) in litigation financing related to car financing selling requirements in the UK, a market that is expected to generate billions in compensation.
Funds will be deployed through equity -bound notes and investors will receive a share of 50% of the recovery requirements that are divided proportionately between investors, BitFinex Securities said.
Both lists will be available to investors as a marketable tokens via BitFinex Securities’ secondary market. Tokens has been issued on Liquid Network, a side chain of Bitcoin developed by the technology company Blockstream, where transfers require issuing approval, with a Whitelist system that ensures compliance standards and jurisdictional requirements.
Looking back in time, BitFinex Securities’ foray to tokenized RWAS FOREVERDATE DATE WITH A LIKE THE CURRENT TENDER FOR BLOCKCHACK-BASED financial assets issued by institutions such as Blackrock or Franklin Templeton.
The company started with niche products such as a tokenized Bitcoin Mining Hashrate contract linked to Blockstream, followed by a number of bond issues, including the first tokenized US Treasury offering in the beginning crypto hubs of El Salvador, which brought T-Bill investments to individuals and organizations previously unable to access these products.
Jesse Knutson, head of operations at BitFinex Securities, has a philosophical view of the current tokenization trend.
“We will be able to help people bridge that gap for investors,” Knutson said in an interview. “Whether it is a company or a bond issue, or whatever it is, to raise capital and kind of filling, the gap left by banks in many parts of the world that just is not willing to borrow or where people are struggling to gain access to capital.”
Knutson was fresh from a panel for digital assets in London along with Blackrock and Britain Asset Manager Schroders, saying there is something of a bias in the ecosystem against fixed income. Most of the focus is around money market funds where people tend to buy and hold to get a dividend, so there just isn’t much trade, he said.
“A big part of this is about disinteresting, and I think it’s something that institutional guys don’t quite get,” Knutson said. “When you look at the details of what they have actually done, it’s typically left hand to the right hand. It’s the same kind of people. It goes through deposits, it goes through transfer payment agents, all the normal kind of parts of the traditional ecosystem that I don’t think is technologically necessary.”
Read more: How the next wave of RWAs becomes Crypto’s real edge
