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The blockchain has just disrupted another niche. The British company Nivaura, in partnership with Microsoft’s Azure cloud, has proved in a test that the public registry can be used to take over regulated assets. The blockchain is an increasingly attractive option because the payments industry continues to adopt cryptocurrency and even digital money.
The technology was created by Avtar Sehra, CEO of Nivaura, chief product architect and theoretical physicist, who has changed careers to discover a slew of inefficiencies in investment banking.
Two structured notes of equivalent economy were issued to retail investors using @nivaura technology. A cleared centralized / set on Clearstream and the other on a public open network blockchain $ eth. The change between different post-trade services was with a click of a button. pic.twitter.com/8rDppVo0Ow
– Avtar Sehra (@avtarsehra) March 18, 2018
The startup fintech tested its technology by performing the functions of recording, clearing and settlement on a pair of main protected notes (PPN) according to the FTSE 100 index, which one s’ relied on the Ethereum network and the other on traditional methods, and then compared the results. The experience has succeeded.
If the platform spreads among investment banks and even venture capitalists who raise new funds, among other things, this could lead to a paradigm shift in product design. investment, leaving some third-party vendors and their cool fees.
Blockchain the disruptor
The blockchain is a disrupter of industries, everyone knows it. And now he has made his way into investment management, removing the need for third-party companies that traditionally perform expensive functions related to clearing, settlement and more.
Nivaura gives the example of a UK-based retail investment company that used blockchain technology for a bond issue a year ago. The administrative costs associated with the product, which are generally spread between the issuer and the investors, have been reduced from £ 30,000 to £ 50 over the term of the product.
Nivaura seems to target investment banks with its technology, but it could probably be used by any entity involved in the issuance of bonds, including companies or government agencies, for example .
“There is very little automation in the financial sector, and it is difficult to create something that is automated but flexible.Our system is fully automated, end to end. track all the data and money flows in a proper way, executing the transaction in a legal manner and in accordance with all regulations.That makes sense for issuers and investors, “said Sehra
As explained by one of Sehra’s followers on Twitter, the platform creates a peer-to-peer relationship with the issuer of the financial product and the investor.
Meanwhile, the company chose Microsoft Azure and its Coco Framework for the blockchain because of its support for regulatory guidelines issued by the British Financial Watchdog, FCA.
In addition to Ethereum, Nivaura’s technology also works with the bitcoin network and could possibly support the quorum block chain of Zcash and JPMorgan.
Image from Shutterstock.
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