Blockchain-based bond issuance
North Africa, Tunisia-based olive oil producer Lamar Olive Oil has issued an on-chain bond using the decentralized finance (DeFi) platform Obligate. Obligate announced on the 1st.
The bond is the first bond to be issued denominated in the Euro-linked stablecoin EUROe. EUROe is an EU-regulated stablecoin launched in February this year by Fintech company Membrane Finance.
Underwriting and structuring operations, including credit evaluation and ongoing risk monitoring of the bonds, were reportedly performed by Credora, Obligate’s credit rating partner.
Obligate is based in Switzerland and is regulated as a financial intermediary by the Swiss Federal Financial Market Supervisory Authority (FINMA). The company provides a platform for companies to issue bonds and commercial paper using blockchain technology without going through banks.
Helping Small Business Financing
Obligate CEO Benedikt Schuppli says SMEs are the “largest financial market” by using blockchain technology to connect bond issuers and investors without middlemen, reducing costs and administration fees He said it would give him access to the bond market.
Based on the Polygon (MATIC) blockchain, Obligate provides a secure and transparent platform for on-chain bond issuance, tracking and settlement. Traditionally, the settlement of bond issuances has been left to the issuer and settlement agent, but Obligate’s smart contract replaces both roles with an efficient and automated process.
If the use of this technology lowers the threshold for bond issuance, SMEs will have more options for raising funds.
In March, Obligate launched a bond issue for Swiss commodities trading firm Muff Trading AG on its DeFi platform. At that time, the dollar-denominated stablecoin USDC issued by US Circle was used.
Luca Muff, founder and CEO of Muff Trading, said he chose Obligate because bond issuance through traditional banks is “very tough these days” for mid-sized commodity traders. there is
German tech giant Siemens, meanwhile, issued a one-year maturity bond worth ¥8.88 billion ($64 million) on Polygon in February. However, no stablecoins are used.
Schuppli points out that the current bond market is “a market that only works well for big companies.”
connection:The amended Payment Services Act, which came into effect on June 1, will allow the issuance of domestic stablecoins, bringing benefits to multinational companies.