A new token-backed alternative finance provider is set to launch, focused on the shipping industry.
Magma Maritime will offer tokens that enable fractional ownership of cargo ships, such as dry bulk carriers.
The asset-backed tokens will be tradeable on a fully regulated exchange, resulting in a secondary market for token holdings.
The new offering is for ship owners who would like more manageable and more liquid shipping holdings and for institutional investors seeking direct exposure to the shipping market, but who don’t necessarily have technical knowledge, Magma Maritime said.
The offering is also of interest to traditional financial institutions looking to refinance their existing debt exposure to this asset class.
The group is in advanced negotiations with potential investors to raise an initial amount of $200m (£155m) to purchase a number of modern dry bulk cargo vessels, which will have a tokenised ownership structure.
“The maritime industry is focussing more on sustainability in order to meet specified targets,” said John M Hadjipateras of London shipping John C Hadjipateras & Sons, which is part of the Magma Maritime team.
“This means greater use of younger more efficient vessels, and our new proposition would allow this to happen in a cost effective and efficient way.
“It also makes it easier for institutional investors to gain exposure to the maritime sector, diversifying their portfolios further with asset-backed tokens.”
Andrew Graham, chairman of Magma Maritime, noted that access to finance in the maritime sector has become much harder to secure.
“In recent years the sector has seen a dramatic reduction in the number of banks offering ship finance, prompting a real need for a new financing approach,” he added.
“We believe a sustainable focus is now an imperative for the sector to thrive and Magma can help deliver this with token financed fleets.”