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In a new transaction for the blockchain and mortgage sectors, a blockchain-focused financial services company and investment firm announced the completion of a transaction involving the origination of digital mortgages and the transfer of ownership via blockchain technology. The eNote digital mortgage assets were created on the Provence Blockchain and registered on the financial services company’s Digital Asset Registration Technologies (DART) platform. DART monitors blockchain-based asset transfers and aims to provide an efficient alternative to existing loan tracking database systems.
The mortgage assets come in the form of NFTs, and the investment firm bought the loans through USDF, a stablecoin that was minted by a consortium of US banks. USDF runs on the Provenance blockchain and is exchangeable 1:1 for cash with any of the group members (we have already discussed the proliferation and regulation of stablecoins in previous Consumer Finance blog posts and FinTech here and here)
put into practice: Although apparently a transaction closer to a secondary market transaction, blockchain mortgage transactions may have the potential to transform the mortgage ecosystem, particularly if investors show continued interest for this asset class. To become mainstream, further developments in blockchain-based mortgages will likely need to focus on regulatory considerations, such as state mortgage registration and lending laws.
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