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Debt securities blockchain protocol Obligate issued bonds with the help of Polygon. The issuer was the Swiss trading company Muff Trading AG, which specializes in the supply of precious metals and raw materials from South America. The management of the organization will sell tokenized corporate digital papers using the service, which will be launched on March 27, 2023. The firms did not disclose the volume and terms of the debt issuance.
Obligate allows companies to issue bonds and commercial paper using blockchain technology without relying on banks. The platform combines the power of smart contracts and traditional financial rules. Investors receive ERC-20 tokens, which are a bond that gives the right to receive payment at maturity or collateral in case of default.
“The bond market is the biggest in finance, but it only works well for large companies,” Obligate CEO Benedict Schuppli told CoinDesk. He explained that a notable advantage of issuing debt using blockchain-based protocols is that they connect issuers with investors without intermediaries. This allows for significant cost and administrative fee reductions, allowing smaller firms to access funding through the bond markets.
Luca Muff, founder and CEO of Muff Trading, assured: “As an average commodity trader, the situation with traditional banks is very difficult these days.”
Unlike Siemens on-chain bonds, the Muff issue bypassed traditional bank fiat payment schemes. It was funded using the USD Coin (USDC) stablecoin. The debt is secured by receivables held by Apex Group, a financial firm with about $200 billion in assets.
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