As of April 22nd 2019, Nexo has partnered with Securitize to offer instant credit lines backed by digital security assets. The partnership will utilize the Securitize’s Digital Securities (DS) Protocol.
Nexo’s Digital Securities-backed Credit Lines Explained
Nexo is a crypto lender that grants credit lines to clients in exchange for digital assets. Typically, users deposit Bitcoin (BTC), Ether (ETH) or other cryptocurrencies as collateral for cash— anywhere from $500 – $2,000,000.
Now, Nexo will allow its client base to stake their own digital securities as collateral for instant credit lines.
Per the release, the new service will allow asset owners to retain asset ownership, since users would borrow against their assets, as opposed to sell them.
Digital securities— which are also referred to as security tokens— are touted to bring significant benefits to traditionally illiquid asset classes.
Jamie Finn, Securitize president and co-founder, says the new deal will eliminate the unnecessary middlemen who traditionally cloud such a process:
“I think our integration with Nexo will work really well because it allows me to do something that I can’t normally do without a whole bunch of other parties involved. To be able to go to a website, take my security, lock it up, borrow some money against it, all on my own, without another human involved, is amazing.”
Antoni Trenchev, Managing Partner of Nexo, described how the partnership emphasizes blockchain’s ongoing transition of integrating traditional assets:
“We are excited to be expanding instant liquidity opportunities beyond cryptocurrencies into traditional asset classes that are being brought on the blockchain with the help of our partners from Securitize.”
What do you think of Nexo partnering with Securitize to offer digital securities-backed credit lines? Will the service lead to a further implementation of tokenized assets? Let us know what you think in the comments section below.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.