London Stock Exchange (LSEG) has invested in crypto bond startup Nivaura. LSEG led the seed funding round for the London-based fintech, raising $20 million.
LSEG has taken an undisclosed minority stake in Nivaura as mainstream finance slowly warms up to blockchain technology.
The startup, which issued the world’s first cryptocurrency bond, helps companies to issue and settle debts on the blockchain.
Nivaura is reported to make it cheaper and faster for companies to issue financial instruments, reducing the time from issuance to market by up to 80%.
According to the company’s chief financial officer Gavin Youll, the company has made $1 million in annual revenue since April 2018.
“In the traditional world, you have this complex and paid chain of custody that can be eliminated using a blockchain,” says CEO of Nivaura, Avtar Sehra.“But also the cost of custody potentially goes down for the investors as well.”
“At the moment, if I settle and hold securities to a traditional chain of custody, I’m going to pay a basis-point fee. That means if I’m holding $10 billion, I might be paying like .5 basis points. However, in the blockchain world” [where customers can create and custody their own assets] “I think it’s going to go down to a volume-based fee rather than value-based.”
Santander’s venture capital arm, InnoVentures, and investment firm Digital Currency Group were among the other investors in the initial funding round.
LSEG, one of the oldest stock exchanges in the world, continues to expand its support of blockchain-based infrastructure. In 2017 the exchange partnered with IBM to build a trading platform for digital shares issued by small and medium-sized enterprises in Italy.