Zurich, Switzerland - Obligate, a Zürich-based investment platform that enables companies to issue on-chain bonds and commercial paper to receive funding, recently opened onboarding for issuers and investors. Built on Polygon, the leading L2 blockchain for institutional finance, the platform enables the management of corporate debt financing in a decentralized and fully regulated environment, and opens access to the bond market for digital asset investors.
In advance of the public launch of the Obligate marketplace on March 27th, MUFF TRADING AG issued the first bond on the Obligate platform for an undisclosed amount. MUFF TRADING is a Swiss commodity trading boutique focused on the sourcing of non-ferrous and precious metal concentrates and minerals. The issuance was conducted entirely on-chain, without any banks involved. Luca Muff, CEO MUFF TRADING commented: “We are glad to open a new and alternative way to finance our physical commodity business. We are proud to issue our first secured corporate bond through Obligate and we look forward to increasing the partnership further in the months to come.”
The transaction was secured with receivables held by Obligate partner Apex Group. As opposed to the bond recently issued by Siemens on Polygon, the issuance was entirely funded in USDC, and did not rely on FIAT rails for payment and settlement. The issuance is a major step forward in the adoption of blockchain-based borrowing and lending infrastructure by traditional companies and demonstrates that Obligate’s bond platform is mature and market ready for a wide range of participants.
Benedikt Schuppli, Co-founder and CEO of Obligate commented: “The successful issuance of a bond by a traditional Swiss SME taking place fully on-chain, funded with USDC, is a huge milestone for us and the entire RWA space. Combining DeFi rails with the proven regulatory framework for bonds, we are contributing to the transformation of SME financing to increase access to finance on a global scale.”
By bringing bonds on-chain, Obligate enables all digital asset investors to access the bond market directly from their wallets. The platform also makes it easier for businesses to raise capital and issue their own bonds, by leveraging smart contracts on the Polygon blockchain to reduce existing transaction costs. Smart contracts replace the role of the issuer and paying agent in the settlement layer of a traditional bond issuance, while the blockchain serves as both an asset register and trading venue, challenging existing financial market infrastructure. The platform is built on Polygon, one of the most developed crypto ecosystems, across both traditional finance and DeFi, that offers high scalability, speed and security.
“Access is the key word here. The Obligate platform is a huge step forward for not only bond issuers and investors, but also the greater understanding that practical applications of blockchain will make a marked difference in the fabric of our financial future – democratizing access to borrowing and lending,” stated Colin Butler, Global Head of Institutional Capital at Polygon. “Our job at Polygon Labs is making these asset classes accessible, secure, and scalable, and as such, the Polygon blockchain is ideally structured to be the home of global financial markets, starting with the Obligate bond platform.”
Obligate is also developing additional capabilities with fully licensed partners such as Apex Group, a global financial services provider, with around $200bn in assets under depositary.
Bruce Jackson, Chief of Digital Asset Funds and Business at Apex Group commented: “We are excited to unlock the benefits of DeFi for the real economy by supporting Obligate’s innovative blockchain-based bond platform and issuance with our solutions. With traditional sources of lending restricted by current market conditions, this issuance enables investors to access on-chain bonds and commercial paper at a fraction of the cost and time, within the same secure and regulated framework they are familiar with from the traditional financial markets.”
Obligate (previously branded FQX) recently closed an $8.5 million funding round with investors Blockchange Ventures, Circle Ventures, Earlybird Venture Capital and SIX Fintech Ventures.