Amber Group Executes World’s First Crypto Loan Transaction on CLST Markets as an Electronic Note by FQX AG
The fixed-term transaction was executed as the first electronic promissory note for a stablecoin issued on the Algorand Blockchain
— Francesco Adiliberti, Managing Director for Europe at Amber Group.
ZURICH, CH, Feb. 17, 2022 /EINPresswire.com/ — CLST Markets, an institution-only lending and borrowing venue for stablecoins and crypto assets, has successfully facilitated an unsecured USDC stablecoin loan of several million run by Amber Group for the first time today.
Swiss-based FinTech firm CLST led the successful transaction between Amber Group and an undisclosed counterparty. The underlying asset, a USDC stablecoin issued on the Algorand Blockchain (commonly known as USDCa), has been settled Peer-to-Peer and is based on an electronic promissory note (eNote), a technology provided by FQX which is integrated transparently in CLST. The multi-million USDC stablecoin loan was borrowed by Amber Group for a fixed term and with a contract term of less than a year.
An eNote™ is an unconditional promise to pay a specific sum to another party on a specific future date and can be modularly structured to fit any fundraising goal. The eNote™ is based on blockchain technology and can be easily transferred to any third party (i.e. an investor). Compared to other financing tools, eNotes™ stand out for their modularity and global transferability, based on a standardized legal framework. Single eNotesTM are stored as NFTs on a blockchain. By issuing multiple eNotesTM, an issuer can obtain funding in a manner comparable to commercial paper.
The unsecured transaction marks a milestone in institutional crypto-asset lending by solving the problem of over-collateralization. Borrowers are routinely required to pledge an amount of collateral that exceeds the value of the loan to mitigate the risk of cryptocurrency price fluctuations. This hurdle is hampering the development of borrowing and lending in the crypto asset industry.
Overcoming this hurdle, while keeping risk at manageable levels, will finally allow institutions to unlock the full potential of a maturing short-term debt market as TradFi and DeFi converge.
Counterparty risk is mitigated through the innovative use of electronic promissory notes, a proven method of providing lenders with a globally enforceable legal disposition in the event of default.
Michael Guzik, the founder and CEO of CLST, says there is a lack of institutional-grade infrastructure in lending and borrowing. “Currently, the institutional short-term debt market for stablecoins and crypto assets is severely underserved due to a lack of large-scale lending and borrowing infrastructure that reduces counterparty risk and DeFi protocol,” Guzik says. “We are doubling down on our vision to connect every institution, from market makers to treasuries, foundations, family offices or hedge funds, through a single place of communication.”
Francesco Adiliberti, Managing Director for Europe at Amber Group, says that as a leading digital asset platform, Amber Group helps clients access liquidity, earn yield and manage risk on crypto assets. “As an institution with a global footprint, access to extensive networks of lenders and borrowers is therefore essential for Amber’s trading activities and liquidity management,” Adiliberti said. “Michael and the team behind CLST will make unsecured lending and borrowing more efficient through transaction flow aggregation and we are thrilled to be part of this global network at the very beginning of a new future for crypto assets. on the market.”
CLST is the institutional communication hub for lending or borrowing stablecoins and crypto assets, automating multi-dealer price trading and price matching for institutional traders. CLST Markets integrates next-generation products such as “Request-for Quote” (RFQ), “Fixed Term”, “Call Money”, institutional DeFi protocols, blockchain-based electronic promissory notes and wallet connectivity for automated settlements. CLST aims to address market uncertainties and scaling issues in unsecured and secured lending and borrowing of stablecoins and crypto assets. For more information, please visit www.clst.com
* Disclaimer: CLST borrowing and lending capabilities and stablecoin and crypto asset products are not yet available in the United States.
About Amber Group
Amber Group is a leading digital asset platform operating globally with offices in Asia, Europe and the Americas. The company offers a full suite of digital asset services spanning investing, financing, and trading. Amber is backed by leading investors including Sequoia Capital, Tiger Global Management, Paradigm, and Coinbase Ventures. For more information, visit www.ambergroup.io
FQX is a born global startup headquartered in Zurich, Switzerland. FQX is building the global debt infrastructure for the future of finance using blockchain technology. FQX employs over 20 people in Europe and Asia. FQX caught the eye in 2021 by winning the Swiss Fintech Awards and the Fintech Germany Awards in their respective categories. FQX is backed by notable Fintech investors including SIX Fintech Ventures & Earlybird VC. For more information, visit enotes.tech
Alex von Mühlenen
The Amber group
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