Italian Startup BlockInvest to Tokenize Troubled Loans
Date: 2024-01-20 Author: Dima Zakharov Categories: BUSINESS
Italian startup BlockInvest is making waves in the financial world by announcing plans to tokenize troubled loans, known as non-performing loans (NPLs). With a troubled credit market estimated to be worth billions of euros, BlockInvest aims to revolutionize the industry and provide innovative solutions.
The first project undertaken by BlockInvest will serve as a concept test, exploring the feasibility of issuing digital asset-based securities directly on the blockchain. This initial phase is essential preparation for BlockInvest's primary goal. Following this, the startup will collaborate with credit management company Davis & Morgan, based in Milan, to tokenize real estate-backed NPLs acquired by the company. This initiative will encompass the tokenization of financial agreements and related instruments.
BlockInvest believes that tokenization will bring fractional ownership, increased liquidity, and a more accessible and well-managed market. Backed by Credit Agricole Italia, BlockInvest leverages Polygon (MATIC) technology to power its endeavors.
The key objective of tokenizing these assets on the blockchain is to minimize the impact of troubled risks on financial stability and restore the health of credit portfolios. This move aligns with the growing concern among regulators about the Italian non-performing loan market. In a recent report published on January 18th, the Financial Stability Board (FSB) highlighted that legislation passed in 2016 had reduced the volume of non-performing loans but left complex, likely unrecoverable loans unresolved.
The FSB has called upon the Italian government to continue developing the market, modernize the judicial system to facilitate NPL resolution, and allocate more human resources to address this issue. BlockInvest's innovative approach could be a step in the right direction for tackling Italy's NPL problem.
