Nivaura successfully registers and clears two principal protected notes linked to the FTSE 100
UK-based fintech start-up Nivaura has launched the world’s first blockchain-based investment product using Microsoft Azure cloud technology.
Nivaura’s Ethereum-based blockchain investment platform is designed to reduce the usual costs (and middlemen) associated with post-trade registration, clearing and settlement, making it cheaper and easier for companies to raise funds and launch investment products. The start-up chose to build its platform on Microsoft Azure to comply with guidance released by the UK’s financial regulator Financial Conduct Authority.
Nivaura has also tested its technology to prove that blockchain-based systems can be used to support regulated assets. To do so, it issued two principal protected notes (synthetic investment products that guarantee an investor’s principal while providing profit based on the underlying asset value) to retail investors linked to the FTSE 100. One PPN was settled via the traditional investment clearing infrastructure Clearstream, while the other second economically equivalent note was registered, cleared and settled on the public Ethereum blockchain.
“Very little automation takes place in the financial industry and it’s hard to create something that’s automated but flexible,” said Avtar Sehra, chief executive and chief product architect at Nivaura. “Our system is completely automated, end-to-end. We track all the data, and the money flows in a compliant manner, executing the deal in a legal way and aligning with all regulations. It makes sense for issuers and investors.”