• Lamar Olive Oil has issued a bond denominated in Membrane Finance’s EUROe, the first of its kind for the sustainable agriculture industry.
• The underwriting and structuring process was conducted by Obligate’s credit rating partner Credora.
• Obligate helps small and medium-sized enterprises by providing a safe and transparent way of issuing, tracking and settling debt.
Lamar Olive Oil Issues Euro-Stablecoin Bond
Lamar Olive Oil, a French sustainable agriculture business, has issued an on-chain bond using Obligate’s decentralized finance (DeFi) platform. This is the first issuance to be denominated in Membrane Finance’s EUROe, which is the only EU-regulated crypto stablecoin. The underwriting and structuring process was conducted by Obligate’s credit rating partner Credora.
What is Obligate?
Obligate is built on the Polygon blockchain and helps small and medium-sized enterprises by providing a safe and transparent way of issuing, tracking and settling debt. By lowering the thresholds to issue bonds, companies in developing and emerging markets can gain increased access to funding through smart contracts replacing the role of the issuer and paying agent in the settlement layer of a traditional bond issuance.
Benefits for SMEs
The bond sale from Lamar Olive Oil represents an opportunity for other SMEs to gain access to capital through digital assets while avoiding high transaction costs associated with traditional debt instruments such as bonds or loans. Digital asset investments also provide investors with global liquidity options that are not available in more traditional markets like stocks or mutual funds.
Crypto investors can rely on “frankly nothing” when it comes to regulatory protection as there are currently no clear guidelines regarding how digital assets should be treated from a legal perspective according to former FDIC official Brian Brooks who said this during a speech at Crypto Springs 2021. Regulations often lag behind technology development so it will take some time before governments around the world catch up with DeFi related initiatives such as this one from Lamar Olive Oil.
Overall, Lamar Olive Oil’s issuance of an on-chain bond denominated in EUROe marks an important milestone for both DeFi platforms such as Obligate as well as SMEs looking for alternative ways to raise capital without incurring high transaction costs associated with more traditional financial instruments such as bonds or loans.