Fineqia Picks Nivaura as Partner for Tokenized UK Bond Issue
In another round of tokenization, the Canada-based debt and securities platform has chosen to partner with Nivaura for a fully tokenized bond issue in the UK.
Canada-based securities broker Fineqia has partnered with Nivaura in the hope of delivering a fully tokenized bond issue in the UK, as announced in a press release on Wednesday. This type of tokenization is still a novelty in the crypto space, combining the value of debt assets with the agility of digital assets.
The two companies will run a test on the public Ethereum (ETH) network, including registration and token distribution, before launching a bond program for the UK market. In the meantime, Fineqia will have to provide proof and pass a test to be accepted in the Fintech Sandbox program of the UK Conduct Authority (FCA). The test should be completed by the end of the first quarter.
Fineqia CEO Bundeep Singh Rangar commented as follows on Nivaura’s Ethereum-based solution:
“It gives the Fineqia platform a simple transaction management workflow with a seamless blockchain-based asset registration and clearing solution.”
Nivaura is one of the more experienced platforms in the security token issuance space:
Debt tokenization is a different niche from security token offerings (STOs), which are still used to finance startups. Debt products are much more diverse and offer various levels of risk. The involvement of a public, fully compliant European company would boost the legitimacy of blockchain technology. In the case of Nivaura, the tokenization process uses the Ethereum network, already the biggest platform for tokens.
The European market for tokenized securities remains highly attractive, with the Extauri exchange and Estonia’s Hansecoin planning to become operational in 2019. The UK market may be a different case given the financial sector instability triggered by Brexit. But European fintech startups are gaining strength as transaction innovations make use of the newest technological developments.
There is no consensus yet on the best platform for launching security tokens. Ethereum remains in the lead although EOS also allows for a token standard, but the most important factors in curated token issues are compliance and investor monitoring through know-your-customer (KYC) procedures.