Lendingblock, which operates a regulated institutional-grade digital asset lending and borrowing platform, announced on Monday (July 29) that is launching the first Global Digital Asset Lending Agreement (GDALA). This article explains what GDALA is and why it represents a significant development in the crypto lending space.
Lendingblock “enables hedge funds, exchanges, asset managers, traders, miners and market makers to find liquidity, generate additional yield, facilitate arbitrage strategies, settle shorts and capture directional views of market participants.”
The Lendingblock platform offers:
- Lending Marketplace: an exchange through which “lenders and borrowers of digital assets have access to securities lending in the crypto markets.”
- Loan Lifecycle Management: This means that the post-trade lifecycle is fully automated (including “off-exchange settlement, cold storage of funds, collateral monitoring, margin management, default and liquidation”); the supplied reporting tools make record keeping and reconciliation easier.
- APIs: These extenal APIs provide access to “the exchange’s functionality and market and user data in real-time.” They also allow integrating “trading and back office applications with Lendingblock’s infrastructure.”
Here are a few key highlights from the press release shared with CryptoGlobe:
- GDALA is interesting because it is a powerful and important demonstration of how “conventional capital markets frameworks” can be applied to “institutional crypto markets.”
- In combination with legal support by international law firm Norton Rose Fulbright, GDALA takes concepts from International Securities Lending Association’s Global Master Securities Lending Agreements, ICMA/ SIFMA’s Global Master Repurchase Agreements, and International Swaps and Derivatives Association’s Master Agreements, and applies them to the domain of crypto lending and borrowing.
- By introducing “a standard set of terms for the borrowing and lending of crypto assets,” GDALA should be able to bring additional legal clarity, thereby bringing “trust, transparency and safety to institutional market participants accessing crypto lending markets,” which “should help improve liquidity in crypto markets.”
According to Securities Lending Times, the GDALA “governs the terms of a loan transaction between a borrower and a lender, by providing a bilateral agreement between accredited counterparties,” and “participants can enter into a binding transaction via an onscreen confirmation inside the Lendingblock exchange.”
Steve Swain, CEO of Lendingblock, had this to say:
The introduction of the GDALA not only supports the endeavours of Lendingblock but leads the way for other industry bodies in the digital asset arena. This was a critical milestone for the launch of our platform, to support the lending and borrowing needs of our clients.
And Daniel Franks, a Partner at Norton Rose Fulbright, stated:
We have seen the benefits of master agreements for decades in the traditional capital markets space… Together with the also-innovative wallet security terms over the crypto collateral, the GDALA will greatly facilitate crypto borrowing on the Lendingblock platform, and we were delighted to be at the forefront of developing them. We hope that this enables the further progression of this cutting-edge market.
Lendingblock is a trading name of Upstream Ventures Limited, which is a limited liability corporation registered in Gibraltar.
Featured Image Courtesy of Lendingblock