February 23, 2022
If you are in Securitization, #cdo, #clo, #cmbs this train is coming down the tracks fast. Digital instruments that can read/write, transact, and compute will be the future of these markets. When you have a token that is buying assets that fit a criteria based on verified data then the concept of RBC or Key bank filling a trust that will get tranched up and sold on the street is ridiculous.
The ability for NFT’s to read/write and transact today is revolutionizing collectibles and catalogs of music, IP, etc… add in compute where a smart contract which is programmed to search out and buy mortgages, mezz debt, and other pieces of a cap stack off digital platforms (Oasis Pro Markets, Texture Capital, Rialto Markets, InvestaX, Borsa Italiana) and you see this whole industry evolving. In addition the ability for this token to have real time access to the underlying data from the asset and you understand why this adoption will occur. Instead of stale data by a servicer, with the token based access control with 2FA where the wallet holding the token is the 2FA, you now have real time access to the underlying assets performance data on the asset owners own systems. This is happening now and Blockportal and Trane are live with this on air quality data, this private data oracle connected to a public data oracle (ala Chainlink Labs ) will power the next version of pooled investment products, whether it is mortgages, or real estate asset equity.
Today’s Securitization teams will tomorrow be writing algorithms for pools of capital who want exposure to loan pools that they can not originate. These algorithms will process through smart contracts verified by OpenZeppelin looking at data verified by Inveniam, with marks set by Cushman & Wakefield, and the digital instrument representing a slice of the capital stack will be administered by Apex Group Ltd. The middle and back office function will always continue, it is just that much will be automated, but certainly not all, and especially as you consider multi-jurisdictional compliance.
Digital Instruments are coming, Data is key, Data Verification is key, and Data Architecture is paramount. Join us in Miami for this discussion.