Ablrate’s blockchain-backed secondary market ASMX has now facilitated £9.7m of loan trades and is working on providing more liquidity before introducing a 0.25 per cent transaction fee.
Peer-to-peer lending platform Ablrate – ASMX’s sister company – is now hosting around 500,000 transactions a week.
The plan is to roll out ASMX to other platforms, with a longer-term aim to create a global marketplace for trading private debt. ASMX has built a facility where it can draw information from connected platforms so when this goes live it will be ready to connect with other P2P platforms.
David Bradley-Ward (pictured), chief executive of Ablrate and ASMX, said that ASMX is working to provide more liquidity.
He said the platform is partnering with liquidity providers, which he defined as professional investors that bid on each loan being sold, and that ASMX is testing an algorithmic trading system that provides liquidity on the platform in small amounts.
Bradley-Ward said ASMX plans to start charging a 0.25 per cent transaction fee for both the buyer and seller, once the platform has more liquidity and users of the marketplace can feel this “tangible benefit”.
“Generally, we make a quarter of a per cent either side of the trade but we haven’t charged anyone yet and have just absorbed the costs,” Bradley-Ward said.
“As we get more liquidity providers on board, we’ll charge a small fee and it’ll be worth it, people will get more liquidity and be able to get out of loans quicker. The average trade is £168, so 0.25 per cent would add up to about 40p, it adds up for us while it’s not expensive for individuals.
“We absorb the costs of the ISA, banking and debit and at some point we’ll have to charge but as we’ve said to lenders we’ll only start charging when there’s a tangible liquidity benefit to them and that’s what we’re working on.
“ASMX is growing and growing. At some point we’ll charge for it. Our job is to create liquidity in this marketplace, that allows people to manage risks better, which is something on the Financial Conduct Authority’s radar.
“If there’s proper liquidity in the marketplace you can choose to exit a loan when you want to. That’s what we aim to do, to provide that stabilisation through liquidity.”
The Ablrate and ASMX team has moved to a new office with more space and is in the process of hiring more staff as it expands.