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Babel Finance, a leading global crypto financial services provider, said it has successfully issued the first collateralized USDC note via eNotesTM, a smart contract-based global debt instrument provided by blockchain start-up FQX AG on their Solana environment.
The transaction was executed using a Fireblocks custody wallet, Babel Finance said in a press release. The principal was provided by a Swiss investment firm and secured with smart contract-based collateral denominated in SOL. For the delivery-versus-payment as well as for the collateral management, FQX’s decentralized escrow programs were used. The transaction was initiated using FQX’s Telegram program.
eNotes are blockchain-based debt instruments that are recognized around the globe and can be used for a broad variety of financing purposes. By providing a legal layer for decentralized financing, FQX eNotesTM increases legal certainty and optimize the loan-to-value ratio in the massively overcollateralized DeFi space.
Via Wallet Connect’s Solana gateway to Fireblocks, Fireblocks customers will be able to sign and issue transferable debt instruments in seconds using FQX’s eNote dApp.
“Digitization has been transforming traditional asset classes for over twenty years, with tokenization being the next phase of the evolution,” said Richard Astle, Head of Switzerland & Middle East at Fireblocks. “Prolonged manual processes, limited secondary market liquidity, and mostly bilateral settlements offer a number of areas in debt markets which can be improved by blockchain and smart contracts.”
Through tokenization, investors are able to participate with smaller transaction sizes than traditional debt issuance, making it much more accessible to the broader market, Astle said.
“We’re proud to support new innovations like FQX’s eNotes with Fireblocks’ technology so that more traditional assets can benefit from blockchain’s transparency, security, and speed,” he added.
This transaction marks the beginning of eNotes on Solana. This will help Babel Finance widen its funding sources. For traditional financial institutions that intend to invest in crypto assets, this innovative fixed-income crypto financial product is an investment channel with stable returns and controlled risks.
“We are very excited about the launch of this innovative product and very optimistic about the market prospects for crypto note and bond products using FQX’s eNotes,” said Yulong Liu, Partner of Babel Finance. “Babel Finance will continue to leverage our strengths in product innovation and work with our partners to expand this market.”
Benedikt Schuppli Co-CEO of FQX said: “With eNotes on Solana, accessible via Fireblocks, we drastically reduce economic distance between borrowers and lenders in a cross-border setting and make financing overall radically easier.”