Teylor, a fintech company based in Germany specializing in small business loan digitization, has collaborated with digital asset infrastructure provider Taurus to transform loans for small and medium-sized enterprises (SMEs) into tokenized assets. This initiative is set to offer tokenholders monthly cashflows, creating new investment opportunities in the private debt sector.
In this partnership, Teylor is responsible for originating and managing SME loans through its credit platform. These loans are then partially tokenized on the Taurus infrastructure and made available on the TDX-regulated marketplace. This setup allows professional private debt investors to access returns from these loans through a secure, blockchain-based secondary market.
Blockchain tokenization offers SMEs an innovative way to raise capital and enhance liquidity while providing investors with diversified investment options. Similar initiatives have been seen in Italy, where the Azimut group tokenized a loan portfolio for Italian SMEs through Sygnum Bank in 2021.
Defactor Labs, a decentralized finance (DeFi) lending platform, also engaged in tokenization on June 6, converting $100 million worth of Alpha Bonds into tokens using the ERC-3643 standard. These bonds were tokenized on the Polygon network and lent to SMEs using real-world assets, like receivables, as collateral.
Speaking with Cointelegraph, a representative from Taurus shared that the Teylor Ledger-Based Security for SME Loans would initially launch on Ethereum and eventually expand to other blockchains, including Polygon and Tezos.
Lamine Brahimi, Managing Partner and Co-Founder of Taurus emphasized the traditional challenges of trading private SME debt due to limited secondary markets, typically accessible only to institutional investors. The ledger-based security offered by Teylor enables smaller investments and facilitates token trading on the regulated TDX marketplace. This project represents the first tokenization of a Luxembourg-based private debt portfolio.
In a related development, Banco Santander, a major Spanish financial services company, selected Taurus in November to secure its Swiss clients’ Bitcoin and Ether holdings. This series of collaborations and initiatives showcases the increasing integration of blockchain and tokenization technologies in the financial services sector, offering new avenues for funding and investment, particularly for SMEs.