The World’s First Blockchain-Based Investment Product Launches Using Microsoft’s Cloud
Microsoft announced today that Nivaura, a UK-based financial technology firm that uses Azure, successfully registered, cleared and settled two Principal Protected Notes (PPN) linked to the FTSE 100. This marks the first blockchain-based investment product launched on Microsoft’s cloud platform.
PPNs are synthetic investment products that can be designed to guarantee an investor’s principal while providing profit based on the underlying asset value. Nivaura’s issued instruments were two-month pound-denominated notes paying a coupon of up to 13% per year based on the performance of the FTSE 100 index.
Nivaura chose to leverage the Ethereum blockchain, as it is cheaper for launching investment products due to the reduced need for middlemen and costs associated with post-trade registration, clearing and settlement. Avtar Sehra, Chief Executive and Chief Product Architect at Nivaura, pointed out that a retail firm in the UK used the technology to issue a bond last year and slashed the post-trade administration costs, paid by issuers and investors, over the life of the instrument from £30,000 to just £50.
Nivaura chose to use Microsoft Azure because the platform complies with guidance released by the Financial Conduct Authority (FCA), the UK’s financial regulator. The FCA released guidance aimed at aiding firms from the financial services sector as they move workloads online – from deciding to outsource and selecting a provider, to monitoring how their data is handled. Nivaura has received full regulatory approval from the FCA, which saw the removal of some restrictions and allows the company to operate commercially as a MiFID (arranger) and CASS (custody) firm.
This news comes a month after Bill Gates blasted cryptocurrencies, stating in a Reddit post, “The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing.”