post-title ConsenSys Acquires US Broker-Dealer in Bid to Tokenize Trillion-Dollar ‘Muni’ Bond Market

ConsenSys Acquires US Broker-Dealer in Bid to Tokenize Trillion-Dollar ‘Muni’ Bond Market

ConsenSys Acquires US Broker-Dealer in Bid to Tokenize Trillion-Dollar ‘Muni’ Bond Market
Cryptocurrencies News ,

ConsenSys has purchased a U.S.-based broker-dealer in an attempt to overhaul the multi-trillion-dollar municipal bond market.

The ethereum-focused VC and technology company said it had completed the purchase of the Philadelphia-based Heritage Financial Systems, Bloomberg reported Tuesday. The acquisition gives ConsenSys advisory and broker-dealer capabilities in the U.S., allowing it to offer newly tokenized municipal bonds through its ethereum-based operating system, Codefi.

Local governments in the U.S. have issued municipal (“muni’) bonds to finance public projects since the beginning of the 19th century. Worth nearly $4 trillion in Q3 2018, investors continue to place billions of dollars every year in municipal bonds. Net flows smashed records in 2019 when they exceeded $90 billion, according to a BlackRock report.

But although highly popular investments, muni bond trades frequently succumb to clerical errors; late repayments are common. Because authorities rarely issue debt in denominations smaller than $5,000, the secondary market for municipal bonds is relatively small and inactive.

ConsenSys believes distributed ledgers can disrupt the muni market by automating repayments and track obligations and bond transfers on the secondary market, while a smart-contract layer could also replace much of the legal contract work that presently has to be done manually by banks.

Blockchain could also help local governments issue municipal bonds in smaller denominations. Speaking to Bloomberg, ConsenSys’ global fintech co-head Patrick Berarducci said the technology might encourage residents in the local community to purchase debt, instead of large financial institutions.

Agreement terms and ConsenSys’ purchase price for the Heritage Financial acquisition have not been disclosed. The acquisition comes in the same week ConsenSys announced a 14 percent cut in staff numbers in order to refocus the company on its main infrastructure platforms, which include Infura, PegaSys, MetaMask and Codefi.

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

About Juan Rodulfo

Defined by Nature: Planet Earth Habitant, Human, Son of Eladio Rodulfo & Briceida Moya, Brother of Gabriela, Gustavo & Katiuska, Father of Gabriel & Sofia; Defined by the Society: Venezuelan Citizen (Human Rights Limited by default), Friend of many, Enemy of few, Neighbor, Student/Teacher/Student, Worker/Supervisor/Manager/Leader/Worker, Husband of Katty/ Ex-Husband of K/Husband of Yohana; Defined by the US Immigration System: Legal Alien; Defined by the Gig Economy: Independent Contractor Form 1099; Studies in classroom: Master Degree in Human Resources Management, English, Chinese Mandarin; Studies at the real world: Human Behavior; Studies at home: Webmaster SEO, Graphic Web Apps Design, Internet & Social Media Marketing, Video Production, You Tube Branding, Trading, Import-Exports, Affiliate Marketing, Cooking, Laundry, Home Cleaning; Work experience: Public-Private-Entrepreneur Sectors; Other Definitions: Bitcoin Evangelist, Human Rights Peace and Love Advocate. Author of: Why Maslow: How to use his theory to stay in Power Forever (EN/SP); Asylum Seekers (EN/SP); Manual for Gorillas: 9 Rules to be the “Fer-pect” Dictator (EN/SP); Why you must Play the Lottery (EN/SP); Para Español Oprima #2: Speaking Spanish in Times of Xenophobia (EN/SP). Social Media profiles: Twitter/FB/Instagram/VK/Linkedin/Sina Weibo: @rodulfox
%d bloggers like this: