MQube, a Guildford-based mortgage fintech, has announced that it has successfully tokenized £1.3bn worth of mortgage debt on the blockchain — marking a groundbreaking milestone for Europe’s financial sector. This achievement makes MQube the first fintech in Europe to bring mortgage debt on-chain, signaling a major shift toward digital innovation in lending and securitization.
The process of tokenization involves converting physical or intangible assets, such as real estate or loans, into digital tokens securely recorded on a decentralized blockchain ledger. While previous tokenization efforts have focused on stocks, bonds, and real estate, MQube’s move represents the first time mortgage assets have been digitized in this way, reshaping the future of mortgage markets and financial services across the continent.
MQube says if more lenders begin to tokenise their assets on the blockchain, which is only a matter of time, it could open up a whole new world for banks and building societies.
Stuart Cheetham, CEO of MQube, explains: “The benefits of tokenising mortgage debt right now, is that it allows mortgage lenders to achieve data integrity, transaction security and audit traceability but once the necessary regulatory and operational framework is in place, and there is still a huge amount of work to be done here, the opportunity for the mortgage lending industry is huge.
“The plethora of benefits include the ability to transfer assets from one lender to another cutting out legal process in a remortgage case and saving thousands of pounds per remortgage transaction. Most importantly, however, the tokenisation of mortgage debt, paves the way for a brand-new mortgage securitisation market via the blockchain which involves the pooling of mortgage debt into a tradable and investable mortgage security.”
The securitisation of mortgage debt frees up money for banks and non-bank lenders that was otherwise tied down. The benefit for banks and building societies is increased liquidity, reduced capital requirements, enhanced risk management and the ability to write more loans and grow their business. For consumers it is reduced cost of borrowing and more product choice.
Cheetham, concludes: “This is a remarkable development for our industry and we are proud to be at the forefront of this monumental shift. As a fintech business, we set out to reinvent the mortgage industry and now not only are we now delivering one day mortgages but we are seriously addressing how we can use the cutting edge of blockchain technology to transform the entire banking ecosystem.”
