Lendingblock is a platform that aims to bring cross-chain lending and borrowing financial services to the crypto economy. They are creating a parallel system to conventional capital markets securities lending through a professional trading exchange designed for institutional needs.
Hype has been a huge motivational force in crypto for a while now, and it has played its part in getting the crypto/blockchain to chug along the road towards a beautiful future.
However, such a dramatic and seemingly over-hyped statement needs a real solid case to support it. Many believe that Crypto lending and borrowing financial services are not the reality of the near future. But the community is confident that space is mature enough to handle it.
The Blockchain lending sector
Just as in the traditional fiat lending market, the blockchain lending sector has many and varied niches to fill. Retail investors, businesses and large-scale institutions need to be catered for.
Each of these niches has plenty of room for competitors. The vast majority of these lending businesses are targeting retail lending. Companies such as Celsius, Libra Credit, Nexo, MoneyToken and Salt have moved into this space and are having varying degrees of success in their endeavors. Here, we aren’t talking about the equivalent of $1000 or so, we are talking about lending and borrowing in the hundreds of thousands and even millions of dollars equivalence of crypto in each loan!
The kind of institutions we are talking about here include hedge funds, asset managers, market makers, and exchanges etc. These big hitters will want to leverage their crypto assets and will look for the best service out there.
The Lendingblock platform
Lendingblock’s finely tuned matching engine is being brought to a high level of sophistication, like a sleek Grand Prix racing car, ready for platform launch in early 2019. The advantages here are absolutely obvious — security, transparency, rapidity and infinite scalability.
Lendingblock started out as the vision of co-founders Steve Swain and Linda Wang. They both worked in fintech and have huge hands-on managerial experience. Steve’s résumé includes management roles in Lehman, Credit Suisse, Macquarie, and UBS. Linda is a serial entrepreneur and worked with Deloitte before starting her own mortgage lending platform.
The Lendingblock team has now grown to 20 + members with over 200 years of experience in finance. Their chief software engineer and quant developer Luca Sbardella has big experience on trading desks and also as a hedge fund manager with Investec where he developed algorithms for quantitative hedge fund products. It is easily the biggest thing coming up after Bakkt by NYSE.
Institutional partners and clients
Genesis Capital(An independent investment banking firm restricted to working with public and private companies) has now partnered with Lendingblock and is part of the institutional ‘Alpha group’ who are presently coming to the end of platform testing in a sandbox environment. This group comprises of other partners such as Quoine and Octagon Strategy together with up to 30 other institutional entities — about a third of which are exchanges. These clients are based in Europe, Asia, and the US and all will shortly be onboard next week and throughout December.
It’s believed that quite a few more institution-sized clients are signing up to use the platform and Lendingblock are spending the next few weeks on-boarding them ready for launch for all clients in early 2019.
The loan life-cycle
In the world of finance complete regulatory compliance is the only way to go if you are to be taken seriously, especially by entities on the scale of funds, exchanges and banks. Lendingblock takes the line of putting itself through regulatory compliance in key jurisdictions where regulation already exists. Secondly, where regulation in not yet in force they seek out and work with regulators, and Finally, where there is no regulation it looks to regulate itself under the exactly the same structures as if it were indeed regulated.
At the present time, Lendingblock is awaiting a successful outcome to their submission for a DLT license with the GFSC (Gibraltar Financial Services Commission). Next jurisdiction on the agenda is the US, where Lendingblock are already in consultation with the CTFC and the SEC with the help of their US legal advisors.
Future road map
Lendingblock CEO Steve Swain has said that they will start out dealing with a small selection of crypto assets over short term periods. However, as the year progresses the crypto selection will broaden out and loan terms will increase to 180 days. He also stated that Lendingblock will move in to the security token market and that the platform will also incorporate stable coins.