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BlockInvest an Italian startup, is set to tokenize non-performing loans

Blockchain In a groundbreaking development in Italy, the realm of real-world asset tokenization is making significant strides, particularly within the expansive distressed loan market, which has surged to encompass hundreds of billions of euros.Pioneering this transformative initiative is the Italian startup BlockInvest, poised to tokenize non-performing loans (NPLs) through two distinct projects. The initial endeavor
 
In a groundbreaking development in Italy, the realm of real-world asset tokenization is making significant strides, particularly within the expansive distressed loan market, which has surged to encompass hundreds of billions of euros.Pioneering this transformative initiative is the Italian startup BlockInvest, poised to tokenize non-performing loans (NPLs) through two distinct projects. The initial endeavor will serve as a proof-of-concept, followed by a second project focusing on the tokenization of Italian mortgages in default. Notably, the Italian NPL market, which reached its zenith at a staggering 360 billion euros in December 2015 (equivalent to $391 billion at the time), has seen a subsequent reduction.

BlockInvest is set to collaborate with Milan-based securitization consultant 130 Servicing in the proof-of-concept phase, aiming to issue native digital asset-based securities notes directly on-chain as a precursor to its primary objective. Subsequently, BlockInvest will join forces with the credit management company Davis & Morgan, also headquartered in Milan, to tokenize distressed real estate credits acquired by the firm. This strategic partnership seeks to facilitate the tokenization of financing agreements and associated instruments.

The implementation of tokenization is anticipated to deliver several key advantages, including fractional ownership, heightened liquidity, and the establishment of a more accessible and efficiently managed market. BlockInvest, backed by Credit Agricole Italia bank, utilizes Polygon technology for this innovative undertaking. As stated by the company, the overarching goal of bringing these assets on-chain is to mitigate the impact of non-performing exposures on institutional financial stability and rejuvenate the health of the loan portfolio.

The Italian NPL market has been a focal point of concern for an extended period. In a report released on January 18, the Financial Stability Board (FSB) acknowledged that legislation introduced in 2016 had succeeded in reducing the volume of NPLs, albeit with a notable concentration of complex “not likely to pay” loans still outstanding. The FSB advocates for continued support from the Italian government to foster the market, enhance the court system to facilitate NPL settlement, and allocate additional human resources to address the issue.

Remarkably, Italy boasts one of Europe’s most sophisticated crypto regulatory frameworks, further underscoring the nation’s commitment to embracing and advancing innovations in the blockchain and tokenization space.

Wasif Shakir

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