The move was carried out via an EVM (Ethereum Virtual Machine) compatible blockchain.
Tokenisation involves converting an asset, such as a property or loan, into a digital token that exists on a secure, decentralised blockchain ledger where each token represents ownership or a share in that underlying asset. While other types of assets like stocks, bonds and real estate have been tokenised before, this marks the first time mortgage debt has been brought onto the blockchain in Europe.
MQube say that, if more lenders follow suit, it could open up new opportunities for banks and building societies, making it easier to trade or transfer assets while maintaining security and traceability.
Stuart Cheetham, CEO of MQube, said: “The benefits of tokenising mortgage debt right now, is that it allows mortgage lenders to achieve data integrity, transaction security and audit traceability but once the necessary regulatory and operational framework is in place, and there is still a huge amount of work to be done here, the opportunity for the mortgage lending industry is huge.”
Cheetham added that tokenisation could make the mortgage process faster and cheaper:
“The plethora of benefits include the ability to transfer assets from one lender to another cutting out legal process in a remortgage case and saving thousands of pounds per remortgage transaction. Most importantly, however, the tokenisation of mortgage debt, paves the way for a brand-new mortgage securitisation market via the blockchain which involves the pooling of mortgage debt into a tradable and investable mortgage security.”
Cheetham concluded: “This is a remarkable development for our industry and we are proud to be at the forefront of this monumental shift. As a fintech business, we set out to reinvent the mortgage industry and now not only are we now delivering one day mortgages but we are seriously addressing how we can use the cutting edge of blockchain technology to transform the entire banking ecosystem.”
