What is Digital Securitization?

Digital Securitization is the process of splitting ownership of any underlying asset into fractional parts, each part represented by a cryptographic token, where each token may be traded and may have a maturity date upon which it will deliver to the holder a formal contract for delivery, cash or access to an online system.

How does it work?

The Peloton Issuer system enables an asset owner or their arranger to securitize and trade an asset. It does this by linking proof of asset ownership to the definition of a trade-able product. Sometimes the asset is a physical commodity and sometimes it’s a financial one, like a debt.

In the Peloton Blockchain system, a product links the underlying asset or commitment to a virtual instrument.

An instrument is a contract between parties. instruments can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity (share), or a contractual right to receive or deliver cash (bond).

The system converts these instruments into individual securities for trading, investment and redemption. Our unique securitization algorithm is constantly enhanced to cover new instruments. THe many switches and settings allow Issuers to define a wide range of instruments.

Benefits of Securitization

Why would asset owners and businesses choose securitization? A few of the many benefits are:

  • Project Funding - debt raised from a broad range of investors is an effective way to fund a project or business expansion
  • Equity Capital Markets - Unlisted equity sales may raise significant funds while avoiding an expensive IPO and the obligations they bring
  • Transaction Financing - Securitizing a large transaction reduces balance sheet requirements while creating secondary trading and investment opportunities
  • Capacity, Infrastructure and Commodities Sale Acceleration - Peloton's unique capability to securitize & redeem real-time assets allows the auction and trading of almost any underlying, providing higher yield trade between wholesalers and retailers

What is a Security Token Offering?

A Security Token Offering is the sale, within a regulatory framework, of cryptographic tokens that each represent fractional ownership of a real underlying asset.

Talk To Us

Contact us to learn more about securitization and the opportunity for your business.