Cadence, a Coinbase-backed alternative investment provider, launched a blockchain-based investment platform for debt.
Cadence, an American blockchain-based alternative investment provider, has launched an investment platform for debt, according to a press release on July 10.
By launching its private credit investment platform, Cadence aims to bring more transparency and efficiency to the asset class in order to help companies grow their businesses. Cadence turns commercial debt into digital tokens that can be traded on its platform.
Private credit, or private debt, is a type of alternative investment which has only been accepted as a separate asset class very recently. Private debt investments are not backed by banks and are not issued or traded in an open market, and are used to fund business growth and provide working capital. Citing data from the Alternative Investment Management Association, the press release notes that total global assets in private credit are expected to reach above $1 trillion.
Cadence's founder and CEO, Nelson Chu explained that the securitization market for private credit has been in “desperate need of innovation.”
The company, which has been recently listed on the Bloomberg Terminal, intends to contribute to the growing asset class by offering its digital securitization technology to expand private debt investments for institutional and accredited investors.
Securitization is the process of establishing a financial instrument that merged from various financial assets into one group.
According to the press release, Cadence is backed by major United States crypto exchange and wallet service Coinbase, having raised $2 million in a funding round co-led by the exchange’s investment arm Coinbase Ventures earlier this year.
Recently, Luxembourg-based securitization firm Argento teamed up with London Block Exchange (LBX) to issue a bitcoin (BTC)-based bond.