Stablecoins Could Unleash Wall Street Adoption Of Blockchain Technology Posted on : Feb 20 - 2019

Following a volatile year in crypto markets, stablecoins are gaining momentum in 2019. Since the first stablecoins emerged in 2014, there are more than 50 different stablecoin projects available to date.

Stablecoins’ growing prominence suggests a shift in the crypto market -- one that is free from the historical volatility of cryptocurrencies, and, many believe, the path to mainstream adoption in the traditional finance world. This is because stablecoins offer a reliable on-and off-ramp for investors, providing the legitimacy associated with traditional fiat currencies, increasing transparency, and removing the need for multiple costly transfers between crypto and fiat currencies.

In turn, the blockchain industry is now successfully linking legacy finance with blockchain-based assets. One major market in particular that stands to benefit from stablecoins and the supporting blockchain technology is real estate finance.

Transactions in this market are complex, since they involve many intermediaries and details surrounding contractual, legal, and compliance elements, along with regular servicing. Moreover, once these investments are issued, they have historically been illiquid. This is partly due to the lack of transparency throughout the capital stack, making it difficult to accurately value the different constituents in a capital market transaction.

Blockchain technology companies are beginning to recognize the size of this opportunity. For example, one such company has successfully launched the first real-world application of a stablecoin being applied in structured finance today. Fluidity Factora has released a real estate token called FACTOR-805, which will allow investors the option to both make payments and receive interest in Dai, the digital asset-backed stablecoin from MakerDAO, which has maintained a soft peg to the U.S. Dollar since it was created in 2017.

FACTOR-805 is a new condominium and retail construction financing near completion, located steps from the Brooklyn Botanic Garden in New York. It is the first of its kind in the United States to incorporate a stablecoin into a transaction.

“FACTOR-805 is a breakthrough. It’s a powerful example of how to unlock more value from investments by bringing real world assets to the blockchain,” said Rune Christensen, Founder and CEO of MakerDAO. “With Dai, investors get the speed, security and efficiency of a cryptocurrency without the volatility that typically defines the space.”

Fluidity Factora is a blockchain technology company formed by the recent union of Fluidity and Propellr, a structured finance platform with years of expertise in private securities and an integrated broker dealer. The combined team is upgrading financial infrastructure by refactoring real world assets as blockchain tokens. View More