CoinFLEX tokenises short-term corporate debt on the blockchain, creates new 24/7 tradable debt market
HONG KONG – December 17, 2020 – CoinFLEX has created a new market for short-term commercial paper, enabling private companies to borrow USD and BTC unsecured for crypto trading purposes. Five trading firms are borrowing millions of dollars each as part of the initial issuance. CoinFLEX users will be able to buy debt note tokens relating to Promissory Notes based loans to Pythagoras Investments, Blitz Group, Mountainville Labs and Grapefruit Trading.
Mark Lamb, CEO of CoinFLEX said “Banks 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. We 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.”
This enables investors to tap into the private debt markets in a liquid, accessible, tradable way with a fraction of the paperwork involved in private placements and loan offerings. CoinFLEX also makes use of it’s unique position as a futures exchange to source trading firms capable of borrowing and will be incentivising debt token buyers by paying them a percentage of the firm’s trading fees for the first 12 months.
CoinFLEX chose the Bitcoin Cash network as the extremely low fees enable daily interest payments to be made to every single token holder without fees eroding the interest being earned. Corporates benefit from lower paperwork costs, no manual overhead in the borrowing and repayment process and a public blockchain based token that represents their debt. Their repayment history becomes public, creating the opportunity for an alternative form of credit score based on public blockchain data and their CoinFLEX trading volume data.
Roger Ver, an investor in CoinFLEX and early buyer of the note tokens, commented that “Crypto lending markets benefit from the liquidity that comes from tokenising loans. The Bitcoin Cash network can easily handle the daily interest payments from thousands of debt notes held by millions of people.”
Founded in 2019 by Mark Lamb and Sudhu Arumugam, CoinFLEX (Coin Futures and Lending Exchange) launched the first physically delivered futures exchange and this year has been rolling out a series of interest rate products, including the first interest bearing stablecoin (flexUSD) and the first tradable repo market in finance.