Fineqia International Inc., a crypto startup that wants to issue and clear tokenized bonds using the Ethereum blockchain announced on Thursday that is has taken a significant step in achieving that objective.
A press release by the firm revealed that it secured a partnership with Nivaura, a white-board capital market platform, and will now work with them to roll out a fully automated tokenized bond issuance and administration solution.
The tokenized crypto-asset backed bond will be registered and cleared on the Ethereum blockchain and have reportedly received interest from institutional investors such as hedge funds and banks. However, the project has to clear a regulatory hurdle first.
Fineqia's solution was among the 29 blockchain and crypto related projects selected by the U.K Financial Conduct Authority (FCA) to partake in a sandbox program, that will reveal whether the solution fits with existing financial systems and complies with regulatory requirements.
As per the release, passing that Regulatory Test was one of the reasons behind the new partnership. Fineqia believes that Nivaura's platform can perfectly blend with their crypto-asset backed bond ambitions to a more significant effect.
Fineqia's CEO, Bundeep Singh Rangar, confirmed in the update,
“Nivaura’s advanced technology is an enabler of financial transaction lifecycle efficiency and [....] gives the Fineqia platform a simple transaction management workflow with a seamless blockchain-based asset registration and clearing solution.”
If Fineqia's Ethereum-deployed solution passes the U.K regulatory test, then clients on the platform can get loans/bonds that are denominated in fiat by redeeming their crypto assets with the startup within a specified period.
The U.K Regulatory Test is expected to take place before the end of this year's Q1 and will represent a major landmark as the region gears up to provide a regulatory framework for the general crypto and blockchain industry.