Blockchain technology is poised to transform the global P2P market, and Ablrate’s chief executive David Bradley-Ward is at the forefront of the movement…
DAVID BRADLEY-WARD has a vision. The chief executive of asset-backed lender Ablrate wants to create a global peer-to-peer marketplace where people can buy and sell loans of any size quickly and securely via a brand new blockchain-based platform.
And while this may seem like a hugely ambitious goal, Ablrate is working on it. In October, the platform launched a partnership with ASMX – a Gibraltar-based business which was specifically set up to create this marketplace.
“This has never been done before, because there have always been issues around settlements,” explains Bradley-Ward. “The average loan on the Ablrate secondary marketplace is £200 and if this became international there are no traditional settlement agents who would take up that sort of value at a cost that would be sustainable.
“So that’s when we started to investigate blockchain technology, and to look at how we could settle trades on a very cost-effective basis, very quickly.”
ASMX allows P2P platforms and loan originators to integrate with similar platforms across the world, creating a market in which all lenders will be able to access all authorised loans at any given time.
It is the brainchild of Bradley-Ward, who came up with the concept after realising how popular the Ablrate secondary marketplace had become. More than £28m has been traded since the Ablrate market was launched in 2015 and the number is increasing with over £5m traded in the last month alone.
“Our aim is for any P2P platform to be able to integrate with ASMX and instantly have access to, and add to, that liquidity,” explains Bradley-Ward.
“For instance, say we have 5,000 lenders, and we join up with a lender in Singapore that has another 2,000 lenders. That creates a marketplace of 7,000 lenders, which increases the potential diversification and liquidity for every single individual lender and creates a larger pool of lenders for borrowers on both platforms.”
One of the benefits of blockchain technology is that it stores information in permanent, tamper-proof ‘blocks’. This makes it a perfect fit for loan ledger storage, as it essentially creates an immutable record of all loan data and transaction details. Furthermore, the ASMX solution takes their existing, KYC approved information and creates a digital ID which means that lenders can trade safely on other integrated platforms without having to share their data. These features make blockchain a natural fit for the P2P market. But that doesn’t mean that launching ASMX will be easy.
One of the key challenges of blockchain technology, according to Bradley-Ward, is the builtin latency. Most blockchain protocols allow for mining activity to take place in the background which creates a lag time of up to 10 minutes between making a transaction and seeing that transaction actioned.
ASMX uses a low-latency blockchain technology stack, which allows loans to be bought and sold in real time, regardless of the location of the investor.
“An efficient market gives lenders confidence to know that that they don’t necessarily have to be in a loan for very long if they don’t want to be,” says Bradley-Ward. “And the price transparency allows for better risk management.”
A global marketplace with increased liquidity – Ablrate’s partnership with ASMX’s new venture could represent the first step towards the future of P2P lending.