Digital Assets: Another Effort To Put Munis on the Blockchain – ConsenSys Rises to the Challenge
ConsenSys is serious. It has already acquired broker-dealer Heritage Financial Systems.
ConsenSys will now attempt to put the stubbornly traditional municipal bonds market on the blockchain. A previous shy at the task by Neighborly, whose backers included Laurene Powell Jobs, proved stillborn.
ConsenSys will tokenize the $3.8 trillion municipal bonds (munis) market, according to CryptoBriefing.
The travails of the munis market
Munis have remained locked in a sort of time warp. Problems such as liquidity, slow or inaccurate information on current ownership, human errors in interest payouts, and the inability to issue them in smaller denominations plague this huge market.
However, the blockchain may put paid to these issues, according to ConsenSys. “It’s a great use case of the technology,” said Emma Channing, the coordinator for the deal with Heritage Financial Systems, to Bloomberg. Therefore, issuing minis (bonds in smaller denominations) will be a breeze, and coupon payments could be automated.
“There’s a strong desire and demand for more local engagement and more democratization of these types of muni offerings,” Channing said.
How the blockchain will help
The blockchain technology relies on a distributed and digital ledger that updates transactions in real-time, along with associated smart contracts.
ConsenSys was recently in the news after it was selected for Covantis, a blockchain-focused agri-focused project. It is backed by multinational agri-business companies Cargill, Archer Daniels Midland Company, Bunge and Louis Dreyfus Company. ConsenSys will digitize the firms’ global shipping transactions using distributed ledger technology (DLT) and AI.
In the case of munis, the blockchain would help democratize the market, allowing the common citizen to participate. Furthermore, investments in smaller denominations and instant ownership checks would be possible.
For instance, a citizen who has invested in the bonds to build say, a recreation center, would get free access to the center by virtue of the investment. The blockchain will instantly verify the fact.
Latest Alternative Investment News
RWC Partners fund manager Graham Clapp warned that sustainable investing trends are poised to form a possible bubble in the markets. He compared it to the tech boom of the 1990s….
Former hedge fund manager Whitney Tilson has called Berkshire Hathaway (NYSE: BRK.A) the to retirement stock. Tilson, who now writes for Empire Financial Research, issued a note this week praising…
Invesco, the fund manager with $1.23 trillion in assets under management as of December 31, 2019, has launched in Europe a new, first-of-its-kind, sterling-denominated, corporate bond ETF with an ESG…
SIX Swiss Exchange announced it had struck a partnership agreement last week with San Francisco-based Omniex. The financial terms of the agreement, which also includes the acquisition of a stake…