Implementation of blockchain credit systems
Implementation of blockchain credit systems

Implementation of blockchain credit systems

By Fabio Lugano - 11 Sep 2018

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The application of blockchain technology to the world of loans will generate an evolutionary leap that will facilitate the matching of supply and demand for credit and create a more transparent and efficient sector.

The intersectoral exchange of technologies is one of the major drivers of economic growth. Velcro was created for the aerospace industry but now has become an object of use in everyday wear.

Arpanet was created for a strategic defence system and then became the Internet that we all use every day.

Despite a mixture of mistrust and enthusiasm, blockchain technology is already changing the financial sector.

Now the next step is implementing it to the real estate credit sector, ie mortgages, where usually the supply and demand are characterized by a strong discrepancy: the mortgage is legally designed not for those who need it, but for the customer with money, so it contains a series of unnecessary and burdensome clauses and forecasts.

In this sector, blockchain-based systems can lead to two big steps forward: increasing the transparency of the offer and making formal procedures simpler and less expensive.

As for the first case, an interesting startup is Block66.

This new initiative aims to create a platform where you can track all mortgage contracts related to individual properties, preventing or reducing the possibility of financial fraud.

In addition, the same platform contains all federal and state legislation on real estate contracts as well as allowing lenders to tokenize mortgages for subsequent redistribution to retailers.

Basically, the lender is a procurer, certifier and organizer of the mortgage itself, and sells token derivatives to retail investors who can commit their money in a more profitable way.

As for the second point, currently, the collection of signatures from both parties is a complex and expensive process, which often even involves specific fees and takes time.

On the contrary, the implementation of blockchain technology would allow moving documents and an identity assessment of the parties at no cost.

Services such as Stampd, which is part of the Blocknotary family, would make document flow and certification quick and inexpensive.

Fabio Lugano

Graduated with honors from Bocconi University, Fabio is a consultant for companies and wounded shareholders of the Banche Venete. He is also the author of "Scenari Economici", and lecturer and analyst of cryptocurrencies since 2016.

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