BlockEx has teamed up with international law firm to create standardised, smart contract templates for the vast majority of bond issuance legal documentation.
Partnering with Winston & Strawn LLP to turn 90% of the legal paperwork needed for bond issuance into smart contracts, the firm hopes to reduce time and cost for small businesses.
BlockEx also wants to automate the entire lifecycle of a bond so that costs to businesses can be cut further. The BlockEx Digital Asset Platform, due to launch at the end of May 2017, will have full exchange, while label brokerage and debt origination tools.
The company wants to democratise bond issuance for SMEs, and allow them to enter the bond market at lower costs.
“We have received a lot of interest from SMEs who have been excluded from capital markets because the costs of going through a bond issuance are too high,” – James Godfrey, MD Capital Markets, BlockEx
The usual cost for bond issuance ranges between $200,000 – $400,000 once all of the banking and legal fees are taken into consideration. Listing on exchanges and obtaining bond ratings can add $165,000 – $200,000.
The company estimates that the new solution will reduce costs by 50 – 70%.
The platform allows for instantaneous clearing and transaction settlement means that bond trades could take 30 seconds instead of five days.
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