MBSToken launches to transform the $11 trillion MBS market

Asset Token Ventures has introduced MBSToken, a platform designed to offer increased liquidity, transparency, and accessibility to the $11 trillion mortgage-backed securities market.

The MBSToken initiative comprises two separate funds targeting different investor categories. MBSToken ITM serves non-U.S. investors, while MBSToken IITM is aimed at U.S. investors. Through blockchain technology, these funds facilitate institutional-grade mortgage-backed securities investments, previously restricted to major financial entities, to a broader range of investors.

David Robnett, Co-Founder and Managing Director of Asset Token Ventures, remarked, "The fixed-income market, particularly MBS, is ripe for innovation. We are bringing institutional-grade MBS investments onchain, unlocking liquidity, improving transparency, and offering investors a seamless way to gain exposure to one of the most important financial markets."

MBSToken aims to tackle various inefficiencies present in the mortgage-backed securities market. The tokens are supported by pools of mortgage-backed securities, including those guaranteed by U.S. government-sponsored bodies such as Fannie Mae, Freddie Mac, and Ginnie Mae. Asset Token Ventures also highlights the tax benefits linked with their USVI-based funds, which qualify for a 90% income tax exemption, potentially allowing for deferred taxable appreciation until token redemption.

Transactions within the MBSToken framework are recorded on a blockchain, ensuring real-time insight into asset performance and the structure of portfolios, with security bolstered by organizing MBS holdings into bankruptcy-remote funds for additional investor protection.

John Matheson, Co-Founder and Managing Director of Asset Token Ventures, stated, "Fixed-income markets are undergoing a digital transformation. By leveraging blockchain technology, we are making MBS investments more accessible, more efficient, and ultimately more valuable for global investors."

The launch of MBSToken echoes a burgeoning trend among institutional investors such as family offices and sovereign wealth funds who are seeking to diversify holdings with secure, yield-generating assets.

Paul Talbert, another Co-Founder and Managing Director of Asset Token Ventures, commented, "We believe tokenization will redefine how capital is deployed in traditional markets. MBSToken is the first step toward a more inclusive and efficient financial ecosystem, one that integrates the best of institutional finance with blockchain's transformative potential."

The U.S. mortgage-backed securities market, valued at $11 trillion, is of considerable significance in global finance, yet its complexity has traditionally stymied broader participation. The MBSToken initiative represents an effort to digitise fixed-income markets and bridge traditional finance with blockchain efficiencies.

The advent of MBSToken aligns with industry trends as financial institutions are increasingly exploring tokenization to enhance liquidity and reduce costs in the financial markets.