Mortgage fintech MQube has announced that it has tokenised £1.3bn of mortgage debt on the blockchain, becoming the first company in Europe to bring mortgage assets on-chain.
The milestone, achieved via an EVM-compatible blockchain, was completed through MPowered, the One Day Mortgage™ lender and lending arm of MQube.
The tokenisation of assets involves converting tangible or intangible assets, such as real estate, into digital tokens recorded on a secure decentralised ledger.
While previous examples have included stocks, bonds and property, this marks the first time mortgage debt has been tokenised in Europe – a move MQube says could transform the mortgage and wider financial services industry.
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.
“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.”
According to MQube, tokenising mortgage debt could provide banks and building societies with greater liquidity, reduced capital requirements, and improved risk management.
By freeing up tied capital, lenders could expand their lending capacity and offer consumers lower borrowing costs and more product choice.
Cheetham added: “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.”
