23. February 2024

• Lamar Olive Oil has issued an on-chain bond using Obligate, marking a first for the sustainable-agriculture industry.
• The debt sale was denominated in Membrane Finance’s EUROe, an EU-regulated crypto stablecoin.
• The underwriting and structuring process, including credit evaluation and ongoing risk monitoring was conducted by Obligate’s credit rating partner Credora.

Lamar Olive Oil Issues Euro Stablecoin Bond on Obligate Platform

Lamar Olive Oil, a French sustainability business, has become the first company to issue a euro stablecoin-denominated bond on the decentralized finance (DeFi) platform Obligate. The debt sale was denominated in Membrane Finance’s EUROe – the only EU-regulated crypto stablecoin – enabling both buyers and lenders to benefit from increased liquidity and reduced transaction costs compared to traditional bonds.

Underwriting Process Conducted by Credora

The underwriting and structuring process of this historic bond issuance was conducted by Obligate’s credit rating partner, Credora. This included a rigorous credit evaluation as well as ongoing risk monitoring throughout the duration of the bond sale.

Advantages for SMEs

Smart contracts were used instead of issuers or paying agents in the settlement layer of this traditional bond issuance; this helps small and medium sized enterprises (SMEs), as it lowers thresholds to issue bonds. By facilitating access to funding through such means, businesses in developing countries can also gain increased access to funding opportunities that may otherwise be out of their reach due to stringent financial regulations or limited resources at hand.

Benefits for Investors

Apart from providing SMEs with options for raising capital, investors also benefit from this type of digital asset issuance due to its efficiency and transparency on blockchain networks such as Polygon – upon which Obligate is built upon – allowing them to monitor their investments more closely while reducing transaction costs associated with trading activities.

Blockchain Meets Bonds: How Crypto Can Solve Long-Standing Issues in Capital Markets

As digital assets continue becoming increasingly mainstream within capital markets worldwide, it is likely that DeFi solutions leveraging blockchain technology are here to stay – offering greater liquidity and transparency than ever before when it comes to issuing debt securities while helping companies around the world raise funds more efficiently than before.