{"id":135929,"date":"2020-12-17T22:00:00","date_gmt":"2020-12-17T19:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/one-exchange-is-trying-to-make-debt-tokenization-a-thing-in-crypto\/"},"modified":"2020-12-17T22:00:00","modified_gmt":"2020-12-17T19:00:00","slug":"one-exchange-is-trying-to-make-debt-tokenization-a-thing-in-crypto","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/one-exchange-is-trying-to-make-debt-tokenization-a-thing-in-crypto\/","title":{"rendered":"# One exchange is trying to make debt tokenization a thing in crypto"},"content":{"rendered":"

“# One exchange is trying to make debt tokenization a thing in crypto <\/strong>”
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An increasing number of mainstream financial activities have become blockchain integrated in line with the growing crypto segment. Now tokenized debt markets are entering the space as well.<\/p>\n

\u201cCoinFLEX has created a new market for short-term commercial paper, enabling private companies to borrow USD and BTC unsecured for crypto trading purposes,\u201d the company said in a public statement<\/a> on Thursday. <\/p>\n

In traditional finance, corporate bonds act as a way for participants to give businesses funds in exchange for interest, as described<\/a> on Investopedia. Investors receive their initial capital back at the expiration of the bond. <\/p>\n

The new offering from CoinFLEX essentially transforms this process by selling participants a blockchain-based form of short-term corporate debt bonds. Operating on the Bitcoin Cash blockchain, the system currently has several million dollars in play, based on loans dished out to a number of trading entities, including Akuna Capital. <\/p>\n

\u201cBanks currently lend prop trading firms capital for FX, equities and all kinds of traditional asset trading but no bank will lend capital for crypto trading,\u201d CoinFLEX CEO Mark Lamb said in the statement. <\/p>\n

\u201cWe think this gives an opportunity for CoinFLEX to meet this enormous need and scale this product to hundreds of firms borrowing tens of billions of dollars without the need for banks,\u201d he added. Exchange customers can also trade these debt tokens.<\/p>\n

Regulation has become increasingly relevant in crypto in recent years, so one might wonder what kind of legal processes are involved in launching such a product. “Debt markets and lending markets are highly regulated industries and to create tradable, tokenised markets for private company debt required an enormous amount of legal and compliance work,” Lamb told Cointelegraph. “The end outcome is a Trust company that can facilitate the needs of crypto borrowers and lenders worldwide for a wide range of transactions.”<\/p>\n

As far as availability goes, CoinFLEX excludes<\/a>\u00a0participation from companies based in a number of regions, including the United States.\u00a0<\/p>\n

Decentralized finance, or DeFi, is another example of traditional finance coming to the blockchain, providing the markets with trustless lending and borrowing. <\/p>\n

UPDATE Dec. 17, 19:33 UTC: This article has been updated.<\/em><\/p>\n