Milan, Italy – January 2024 – BlockInvest, a tokenization platform backed by Crédit Agricole Italia which aims to transform the traditional private market by making financial assets digital on-chain, is forging ahead with several initiatives in the tokenized distressed credit markets.
These markets (known in Europe as non-performing loans or NPEs) currently face information asymmetry, few operators, liquidity issues and could greatly benefit from the opening of a secondary market. Managing and resolving NPEs is a critical aspect of risk management for banks and other lending institutions. The goal of bringing these assets on-chain is to minimize the impact of non-performing exposures on the institution’s financial stability and to restore the health of the loan portfolio.
Only in Italy the NPE market accounts for over 300 Billion in 2023. European authorities, including the European Central Bank (ECB), actively address NPE challenges, urging banks to implement effective strategies to increase the number of transactions on the secondary market.
Blockchain and tokenization can revolutionize the NPEs markets by ensuring transparency, efficiency, and global accessibility, addressing longstanding challenges in the NPE market.
BlockInvest’s framework enables not only fractional ownership, enhances liquidity, and fosters a more efficient and accessible market for distressed assets (through tokenization), but also supports its clients to effectively manage the underlying “bad loan” lifecycle entirely on chain, including the credit recovery phase, the investor communication and voting, and the regulatory obligations. This approach materializes in two projects:
- The first initiative is a Proof of Concept for on-chain digital note issuance. With the aim of validating the efficiency of blockchain technology compared to the current state, BlockInvest has initiated a strategic agreement with 130 Servicing, a leading Italian Master Servicer and securitization services provider company (250 SPVs actively managed with 2,600 portfolio purchased and 21 Bn EUR AuM)— making it the first to approach tokenization in Italy. This Proof-of-Concept project seeks to issue native digital ABS notes directly on-chain and serves as a precursor to a larger-scale initiative, with the ultimate goal to offer tokenized services to new and existing clients.
- The next initiative focuses on tokenizing for the first time, distressed credits secured by real estate mortgages acquired by Davis & Morgan S.p.a., an Italian regulated financial institution with around 100M AuM. The project involves the fractionalization of the specific deal’s financing agreement and other related instruments using the BlockInvest token model design to support these distressed assets.
In this sense, the Bank of Italy selected Davis & Morgan S.p.a in the Innovation Hub section of the bank’s Call For Proposals 2022 after going through the necessary regulatory compliance evaluation process and offered support from the bank for 6 months before going to market.
Why Polygon? BlockInvest will harness the cutting-edge technology of Polygon PoS to innovative solutions across various industries. With this relationship, BlockInvest will ensure the scalability, speed, EVM compatibility and security of the Polygon protocols to engage in different initiatives, focusing also on a new market for the blockchain community, the NPE markets.
BlockInvest Founder and CEO, Lorenzo Rigatti, expresses enthusiasm about the collaboration, stating, “This collaboration with Polygon Labs is a game-changer for BlockInvest and the entire asset tokenization industry. When dealing with regulated entities in such complex processes and structured underlyings, choosing the right protocol is crucial. By adopting the advanced blockchain technology of Polygon protocols for our projects, we aim to set new standards for security, speed, and accessibility in asset tokenization.”
Polygon Labs’ Global Head of Institutional Capital, Colin Butler, echoes this sentiment, saying, “The global financial markets are only set to benefit from broader adoption of tokenization technology, and we are excited to see BlockInvest bring this infrastructure to two new products. As the markets begin to recognize the benefits of disintermediation and ease of access, we are going to see this technology continue to expand, and BlockInvest will be at the forefront of that movement.”
Polygon Labs’ Head of BD, EMEA and Latam, Sergi Mata: “Italy is one of the strongest markets in the web3 space in Europe; we have seen a very positive trend in web3 adoption, and we want to ensure that projects such BlockInvest, that capitalizes on both degree of innovation and support from institutions are backed by Polygon protocols”.
BlockInvest is a rapidly growing fintech startup based in Milan, Italy. We provide “plug and play” and customized solutions for companies and financial institutions looking to enter the blockchain space. Our expertise lies in tokenizing various real-world assets, making them accessible on the blockchain. In December 2021, we became the first Italian startup to receive an investment from Crédit Agricole Italia. In May 2023, Banca d’Italia selected us in their Call for Proposals for creating a platform for issuing tokenized debt instruments.
Polygon Labs develops Ethereum scaling solutions for Polygon protocols. Polygon Labs engages with other ecosystem developers to help make available scalable, affordable, secure and sustainable blockchain infrastructure for Web3. Polygon Labs has initially developed a growing suite of protocols for developers to gain easy access to major scaling solutions, including layer 2s (zero-knowledge rollups), sidechains, app-specific chains and data availability protocols. Scaling solutions that Polygon Labs initially developed have seen widespread adoption with tens of thousands of decentralized apps, unique addresses exceeding 261 million, over 1.4 million smart contracts created and 2.7 billion total transactions processed since inception. The existing Polygon network is home for some of the biggest Web3 projects, such as Aave, Uniswap, QiDao and OpenSea, and well-known enterprises, including Robinhood, Stripe and Adobe. Polygon Labs is carbon neutral with the goal of leading Web3 in becoming carbon negative.
If you’re an Ethereum Developer, you’re already a Polygon developer! Leverage Polygon’s fast and secure txns for dApps you develop, get started here.Website | Twitter | Developer Twitter | Telegram| LinkedIn| Reddit | Discord | Instagram | Facebook