Tokenizing Stressed Assets on the HYFI Blockchain
Stressed Assets are a global multi-trillion-dollar problem for the banking sector. But they also present a great opportunity for investors to purchase operational assets at attractive valuations.
Stressed Assets are a global multi-trillion-dollar problem for the banking sector.
But they also present a great opportunity for investors to purchase operational assets at attractive valuations.
Tokenizing Stressed Assets on a legally compliant permissioned platform like Hybrid Finance (HYFI) Blockchain enhances liquidity and democratizes investments.
1. What are Stressed Assets
Stressed Assets
= NPAs
+ Restructured loans
+ Written off assets
Non-Performing Assets (NPA) are loans whose interest and / or installment of principal have remained unpaid for 90 days.
Restructured loans are those that have been given an extended repayment period, reduced interest rate, or other restructuring.
When lenders believe there's little or no likelihood of recovering the amount owed by a borrower, they might choose to "write off" the loan.
2. Benefits of investing in Stressed Assets
According to the Government's India Investment Grid, the benefits of investing in Stressed Assets are:
Returns: Given the risk involved in investing in distressed companies, the IRR is high and there is a potential to earn very high returns.
Liquidity: With better reporting of NPAs, the liquidity in the NPA market is flush.
Cost-Effective Expansion: Distressed companies allow for a strategic way for vertical or horizontal integration.
3. Benefits of Tokenizing Stressed Assets on the HYFI Blockchain
The benefits of Tokenizing Stressed Assets on a legally-compliant permissioned platform like Hybrid Finance (HYFI) Blockchain are:
Enhanced Liquidity
Tokenization divides assets into fractions, which can be readily bought and sold. This can significantly improve the liquidity of stressed assets, allowing investors to enter or exit their positions with greater ease.
Transparent Ownership
Blockchain's immutable ledger ensures that every transaction and ownership change is recorded. This transparency can increase investor confidence, especially in the context of stressed assets where ownership might be contested.
Democratized Investment
By breaking down large assets into smaller tokens, a broader range of investors can participate. This democratizes access to opportunities that might have previously been reserved for institutional or high-net-worth individuals.
Streamlined Transactions
With smart contracts on the blockchain, processes such as verification, compliance checks, and transfers can be automated, reducing the time and cost of transactions.
Enhanced Security
The decentralized nature of blockchain reduces the risk of fraud and unauthorized alterations, ensuring that investments in stressed assets are secure.
Global Accessibility
With tokenized assets on the blockchain, global investors can access these opportunities without the typical cross-border hassles, potentially increasing the pool of capital that can be directed toward these assets.
Real-Time Asset Valuation
Due to the transparency and accessibility of the blockchain, the market can more efficiently determine the value of tokenized stressed assets, leading to fair and real-time pricing.
Efficient Resolution Mechanism
Tokenizing stressed assets might speed up the resolution process for distressed companies, as global investors can rapidly infuse capital, turning around such companies faster.
Regulatory Compliance
HYFI Blockchain ensures that token transactions comply with local and global regulations automatically, reducing regulatory risks for investors.
Easier Asset Management
For large investors or funds managing multiple stressed assets, HYFI Blockchain offers a unified platform to monitor, manage, and make decisions based on real-time data.
To learn more, attend the Live session on Tokenizing Stressed Assets on the HYFI Blockchain:
Friday
29 September
3pm IST
Join this WhatsApp group to register: https://chat.whatsapp.com/LUERtOz7YK40E8UtqTlPpm