Fineqia, a service platform to support security issuances and administration of equity and debt today announced its subsidiary Fineqia Ltd has partnered with Nivaura to use its white-label capital markets platform to perform a fully automated tokenized bond issuance and administration, registered and cleared on a public Ethereum blockchain, to conduct its test for issuing crypto asset-backed bonds.
Fineqia Ltd’s test is required as part of its acceptance into the U.K. Financial Conduct Authority’s (FCA) Sandbox Regulatory Program announced in July 2018. It was amongst 29 companies accepted out of 69 applicants that met the FCA Sandbox eligibility criteria. The test is set to take place in Q1 of 2019, with results also to be obtained in the first quarter.
It will enable owners of cryptocurrencies such as bitcoin and ethereum to borrow fiat funds via the issuance of crypto asset-backed bonds. The product has found appeal among institutional owners of crypto assets, such as miners, funds, and exchanges, seeking liquidity but not keen on selling their cryptocurrencies. Fineqia’s partnership with Nivaura allows for such institutional asset owners to offer transferable fiat denominated bonds to investors for fixed durations and coupons.
“Nivaura’s advanced technology is an enabler of financial transaction lifecycle efficiency and is why we chose to invest in the company last year. It gives the Fineqia platform a simple transaction management workflow with a seamless blockchain-based asset registration and clearing solution.”
Fineqia had invested in Nivaura in Jan. 2018, alongside New York-based Digital Currency Group (DCG) and London-based international law firm Allen & Overy, for minority equity interests in Nivaura.
Fineqia Ltd will deploy a fully automated bond issuance and administration platform utilizing Nivaura’s technology, which enables managing the end-to-end instrument lifecycle at a significantly lower cost than existing channels and ensures full compliance with relevant arranging and custody regulations. Issuers will be able to structure, execute and administer legally enforceable bond contracts using public blockchain or traditional clearing infrastructure.
Fineqia Ltd can enable the issuance of asset-backed bonds using traditional depository and clearing infrastructure too, using the same Nivaura technology, if required.