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Securitize joined forces with BNY Mellon to offer a new type of investment fundaccording to press release on October 29.
This fund will be providing digital access to high quality credit productsespecially the more valued parts of structured loans known as collateralized loan obligations (CLOs).
Instead of using traditional systems, the bottom will be issued and recorded on the blockchain. This method converts real-world investments, such as loans, into digital tokens that live on a distributed ledger.
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BNY Mellon will safeguard the fund’s financial assets. A company linked to BNY Mellon will also manage the fund’s day-to-day operations and manage investments.
Structured loans, particularly CLOs, are commonly used by financial institutions to gain exposure to various types of corporate debt. CLOs are tiered based on risk, with the top-rated AAA tier considered the safest.
These layers usually pay interest based on market rates, which has made them attractive to many investors. Globally, the issuance of CLOs has reached more than $1.3 trillion.
Carlos Domingo, CEO of Securitize, described the launch of the fund as a way to make strong credit products more accessible and easier to manage using digital systems.
This new fund is being launched as Securitize prepares to go public.
Custodia Bank and Vantage Bank recently partnered to launch a blockchain-based service. What is the purpose of this service? Read the full story.
