Charlie Moore, CEO
The capital markets domain has opened its door to blockchain technology initially through crypto trading desks and increasingly with initiatives to reduce settlement time and increase liquidity for established assets. Blockchain technology, delivers the assurance of a shared ‘system of record’, coupled with the empowerment of smart contracts, embedding digital code to that improves execution efficiency. The immutable shared ledger, and ultimately native blockchain assets, ensures asset data is safeguarded from errors and tampering, offering enhanced asset certainty for stakeholders. Through construction of its blockchain infrastructure for structured credit, Global Debt Registry has provided a refreshing operational shift for a marketplace in which some processes have remained unchanged for decades. From its headquarters in New York City, the Private Equity-backed FinTech company is focusing on elevating the funding efficiency in the structured credit ecosystem, while reducing operating cost and saving time.
One of blockchain’s greatest benefits for the credit market is the increased level of loan dataintegrity, ensuring that systems of record and data on the distributed ledger are synchronized across the credit ecosystem. In turn, the reduced need for multiple asset diligence efforts reduces the transaction time, less manual legal work and improved digitization of custody and trustee activities boost processing efficiency as it travels through the market.
“We help issuers, underwriters and warehouse lenders better manage risk, improve transaction efficiency and pricing in the credit markets by providing solutions that ensure the integrity of loan assets,” says Charlie Moore, Chief Executive Officer, Global Debt Registry (GDR).
“The core value proposition lies in getting securitization to market faster and cheaper, benefitting all players, including borrowers accessing better priced loans” asserts Moore. Participants managing blockchain nodes, especially in writing smart contracts, can manage many of the activities electronically and develop innovative new e-structured credit products.
The firm started out with a focus on addressing client needs before looking into this emerging technology approximately two years ago.
Leveraging IBM Blockchain to help facilitate the digitization of credit assets, through a secure, distributed ledger providing a common system of record
When the company realized the clients’ needs “were very much centered around improving the speed and cost of transactions, mostly related to asset data integrity” it began focusing hard on understanding blockchain’s potential.
After multiple POCs in 2017, they settled on IBM’s Blockchain, as the best partner for the use case and clients. “IBM understood the enterprise requirements, security and permissioning requirements in the capital markets. They have the ability to help the evolution of this market in a number of different ways,” says Moore. In leveraging IBM Blockchain for its decentralized solutions, loan characteristics are tokenized and become part of an immutable ledger, establishing a single system of record throughout the loan lifecycle. The independent, ledger reduces potential for errors, and allows for greater transaction volume through faster processes and lower costs.
GDR’s solutions leverage a Credit Token Framework to include Immutable Diligence and ePledge. The former, enables faster and cheaper access downstream to diligence, while the latter ensures an immutable, single-pledge position for reference in UCC filings across numerous industry participants to reduce the potential for errors. The credit token framework provides the rules of the road for participation, data standards, governance and beyond.
An Open Platform
The GDR infrastructure is a collaborative platform for players across the loan lifecycle, not just for investment banks. The platform is open to third party participation, including auditors, custodians and ratings agencies as permissioned by account owners. GDR allows for an openly available Structured Credit Token Framework to support appropriate governance, data standards and emerging interoperability, establishing an inclusive environment where all market players can collaborate.
“We’ve built a new age decentralized registry that is as open as possible while operating in a highly secure, permissioned environment,” says Moore. GDR worked with IBM as a part of their Digital Mentorship Program in 2017, during which the firm was given the opportunity to learn from IBM’s blockchain experts. With GDR’s token framework, based on extensive industry engagement and experience, combined with IBM’s enterprise grade architecture this blockchain platform can serve as the new standard for efficiency, trust and inclusivity for the structured credit markets.