The tokenisation of assets means that tangible or intangible assets are converted into digital tokens, which are recorded on a secure, decentralised and immutable blockchain ledger or digital registry.
The firm said this is the first time that mortgage debt has been brought onto a blockchain in Europe and was a “significant shift” for the mortgage and financial services industry.
MQube noted that if more lenders begin to tokenise their assets on the blockchain, this could “open up a whole new world for banks and building societies”.
The benefits for banks and building societies include “increased liquidity, reduced capital requirements, enhanced risk management and the ability to write more loans and grow their business”, and for consumers, they will see “reduced cost of borrowing and more product choice”.
Stuart Cheetham, CEO of MQube, said: “The benefits of tokenising debt right now [are] that it allows mortgage lenders to achieve data integrity, transaction security and audit traceability, but once the necessary regulatory and operational framework is in place – and there is still a huge amount of work to be done here – the opportunity for the mortgage lending industry is huge.
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“The plethora of benefits include the ability to transfer assets from one lender to another, cutting out legal process in a remortgage case and saving thousands of pounds per remortgage transaction.
“Most importantly, however, the tokenisation of mortgage debt paves the way for a brand-new mortgage securitisation market via the blockchain, which involves the pooling of mortgage debt into a tradable and investable mortgage security.”
He noted: “This is a remarkable development for our industry and we are proud to be at the forefront of this monumental shift. As a fintech business, we set out to reinvent the mortgage industry, and now, not only are we now delivering one day mortgages, but we are seriously addressing how we can use the cutting edge of blockchain technology to transform the entire banking ecosystem.”
Last month, the firm partnered with Nottingham Building Society for the launch of the latter’s broker portal.
