• Lamar Olive Oil has issued an on-chain bond using Obligate in a first for the sustainable-agriculture industry.
• The French company’s bond is denominated in Membrane Finance’s EUROe, which is the only EU-regulated crypto stablecoin.
• The underwriting and structuring process was conducted by Obligate’s credit rating partner Credora.
Finance Olive-Oil Producer Issues Euro Stablecoin Denominated Bond
Lamar Olive Oil, a French sustainable agriculture business, recently issued their first ever Euro Stablecoin denominated bond on Obligate’s decentralized finance (DeFi) platform. This debt sale was the first of its kind for this type of business. The issuance was made possible through credit evaluation and ongoing risk monitoring conducted by Obligate’s credit rating partner Credora. The Euro Stablecoin used for the denomination of the bond is Membrane Finance’s EUROe, which is currently regulated by European Union laws.
What Is Decentralized Finance?
Decentralized finance (DeFi) is based on blockchain technology and works to make it easier for small to medium sized businesses to access funding opportunities through issuing bonds with lowered thresholds. It also helps to streamline processes such as tracking and settling debts while providing more transparency throughout the whole process. Smart contracts are used as issuers and paying agents in the settlement layer of a traditional bond issuance.
Benefits Of Using DeFi For Bond Issuance
Issuing bonds via DeFi has many advantages over traditional methods including increased liquidity, improved accuracy within transactions, real time data access and reduced costs from manual labor that would otherwise be required when utilizing paper-based systems.. Additionally, businesses can now access global markets that were previously closed off due to high barriers to entry or lack of trust among potential investors located outside their home country. Moreover, these digital securities provide stronger investor protection compared to other asset classes since they are held in secure wallets rather than at a custodian or broker dealer where they could potentially be subject to misappropriation or fraud.
How Does Membrane Finance’s EUROe Work?
Membrane Finance’s EUROe is an EU regulated cryptocurrency stablecoin created by an independent third party issuer located in Switzerland which allows users to trade digital assets without worrying about volatile market fluctuations like those seen with Bitcoin or Ethereum trading pairs . It works similarly to other stablecoins but has additional features such as 24/7 customer support , multi-currency conversions , direct deposits from banks into user accounts , and low transaction fees . This currency also provides built in KYC/AML protocols so users can remain compliant with local regulations without having to worry about their funds being frozen or seized due to noncompliance issues .
Conclusion
The ability for businesses like Lamar Olive Oil to issue bonds via decentralized finance platforms has opened up new doors for companies looking for alternative financing options while providing investors with greater security measures than traditional asset classes offer . With the increased usage of blockchain technology continuing across multiple industries , it will be interesting to see how DeFi continues impacting capital markets around the world .