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The Valley Forge, Pa.-based investment manager worked in close collaboration with blockchain startup Symbiont, an unnamed U.S. ABS issuer, BNY Mellon, Citi and State Street. Vanguard modeled the full lifecycle of an ABS settlement on blockchain in the pilot.
Vanguard’s end goal for the pilot is to improve the process of securitization with blockchain. The decades-old Wall Street practice of repackaging loans into bonds sold to investors is one that many firms are trying to reimagine with blockchain technology. In March of this year, mortgage equity startup Figure securitized $150 million in home equity loans.
Vanguard and Symbiont have been working together to use blockchain technology in capital markets since December 2017. Vanguard hopes to see faster, more transparent and more automated markets because of the technology.
“Vanguard is dedicated to providing innovative, world-class solutions that help advance the financial services industry,” Warren Pennington, principal and head of Vanguard’s Investment Management FinTech Strategies Group, said in a press release, adding:
“By digitizing and streamlining the ABS issuance process, we will be able to increase the speed and transparency of transactions while reducing costs and minimizing exposure to risk, which ultimately leads to a more efficient business model for future generations of capital market activity.”
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Three Arrows Capital Now Holds More Than 6% of Grayscale’s $3.6B Bitcoin Trust
The firm filed a schedule 13D disclosure to the SEC on Thursday after accumulating 21,057,237 shares, or 6.26%, of the trust for an amount valued over 20,000 bitcoin (BTC) or around $192 million, according to a filing dated June 10. (Grayscale is a subsidiary of Digital Currency Group, CoinDesk’s parent firm.)
A Schedule 13D form or beneficial ownership report is required when a person or group (firm) acquires more than 5% of any class of a company’s shares. The information must be disclosed to the SEC within a 10-day period from the date of the transaction under current regulations.
Grayscale Investments is the world’s largest digital currency asset manager with its flagship product, the Grayscale Bitcoin Trust that was set up in 2013. As of June 11, the trust holds approximately 365,000 bitcoin worth $3.6 billion, according to Grayscale’s website.
“Grayscale is one of the most professional and beneficial companies in the crypto ecosystem. We enjoy working with their team and are proud to be the first investor to file a Schedule 13D/G with the SEC for over 5% ownership,” said Su Zhu, CEO and co-founder at Three Arrows Capital.
On January 21, GBTC became an SEC-compliant reporting company after filing a Form 10 with the SEC. Also known as the General Form for Registration of Securities it is used to register a class of securities for trading on U.S.-based exchanges. A company with over $10 million in total assets under management is required to file a Form 10 with the SEC.