Blockchain-based secondary market ASMX is set to launch by mid-March, which its chief executive predicts will significantly boost liquidity in the peer-to-peer lending sector.
The new platform for trading global private debt will allow P2P lending platforms and other loan originators to integrate with its blockchain technology, in order to boost liquidity. A number of P2P platforms have already signed up, including The House Crowd and Huddle Capital.
ASMX chief executive David Bradley Ward (pictured), who also heads up asset-backed P2P lender Ablrate, told Peer2Peer Finance News that he expects the regulator to ramp up its scrutiny of secondary markets as part of its protection of consumers.
“I think that’ll be the next thing the regulator looks at, making sure platforms have robust systems that are fair for investors and we’ve spent the past two years building the technology to do that,” he said.
“We wanted to be able to create a market that could trade as little as a pound efficiently and settle it and that’s what we’ve created.
“There has never been a marketplace that has operated in small loans. Our market trades in milliseconds, not days.
“By freeing up trading down to a pound and making it cost effective to do that, that frees up billions of pound of liquid. That’s never been done before.
“The P2P marketplace is estimated to be worth £700bn by 2024. That has to be traded somewhere.
“Any platform without a secondary market will struggle badly for the next year or so.”
The launch has been delayed due to extensive testing of the APIs.
“We’re not far away,” Bradley-Ward said.
“We’re ready to launch the demo platform and it’s looking totally amazing. When ready to go it’ll be industry changing.
“Our plan is to launch it by the end of February, start of March. We’ll be replacing Ablrate’s secondary market with ASMX and we’ve been speaking with other platforms and will operate with others.”
Bradley-Ward highlighted that you need to have an efficient secondary market to allow retail investors to enter and exit when they no longer want to take the risk of the loan anymore.
“The underlying technology we use means that a ledger cannot be changed or hacked, so where loans are bought or sold can’t be changed, so from a regulatory point of view that’s fabulous but allows the efficiency of volume,” he said.
Read our exclusive interview with ASMX chief executive David Bradley-Ward here, where he discusses the P2P sector and the new platform.