How to Optimize Your Business with Non-Traditional Asset-Backed Financing
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Non-traditional financial systems powered by blockchain technology have emerged to fix long-standing inefficiencies of the financial industry. Drawbacks of the traditional non-blockchain financial industry include data breaches, high transaction costs, opaque economic structure, limited success rates, and investor access.
Finance protocols designed on blockchain have managed to overcome such issues and made a huge difference in key areas such as loans, payments, and trading. Now it’s time to apply the same blockchain technology to an even bigger market of Real-World Asset (RWA).
Every enterprise has assets that don’t trade in an open market. Every enterprise has assets that are necessary to the organization yet their value cannot be easily separated and they aren't traded in an open market. Left with no options, enterprises seek financial assistance through debt or equity capital, which can increase liabilities and reduce ownership stake. The perfect alternative to this is asset-backed financing. Which assets? The ones already owned by the enterprise.
Blockchain-driven financial systems will inevitably become the new norm in the financial industry. For starters, they significantly reduce costs for institutions. Overhead costs on centralized databases, bookkeeping, and administrative labor can be eliminated completely. Further, blockchain controls financial risks by promoting better auditing and overall transparency in the system.
These benefits can instantly be leveraged to disrupt the asset-backed financing using RWA. For decades, traditional financial institutions have had full autonomy on how RWA are valued. They
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