Brightvine Announces $147 Million Subordinated Debt Securitization

Blockchain – the mysterious and alluring technology that Bitcoin and so many other cryptocurrencies are built on. As our industry continues to grow, there are more and more applications for this novel technology, invented by Satoshi Nakamoto when he wrote the Bitcoin white paper in 2008.

Today I interview Brightvine CEO Joe Vellanikaran about another of these Applications. Brightvine is a blockchain-powered fixed income platform that connects issuers of high-quality real-world assets with digital investors.

Back in March, I interviewed Joe about the announcement of a partnership with Angel Oak Capital Advisors, the technology venture arm of Angel Oak Companies working on innovative mortgage solutions. The goal of the partnership was to leverage Brightvine’s platform to explore new investment avenues for investors.

Today they announced the first result of this partnership, the first-ever subordinated debt issuance by a bank using blockchain technology, called BFNS 2022-1 – a $147.55 million subordinated debt securitization.

Of course I had a few questions.

CoinJournal (CJ): Can you please summarize how exactly this capital raising and the project being run on the blockchain is an advantage for those who may be unfamiliar with your approach?

Joe Vellanikaran (JV): In a typical securitization, the process of coordinating up-to-date documents and data between multiple parties is a manual and labor-intensive process. The Brightvine portal allows for instant validation of each document against the blockchain’s immutable records, ensuring that the documents used by all parties are always accurate and up-to-date. The distributed ledger ensures that every time a data point is updated, those changes are adopted by all parties in real time.

CJ: We interviewed you about the partnership between Brightvine and Angel Oak when it was announced in Q2 of this year. This is the first collaboration – did you postpone it due to the contagion in the markets?

JV: Our partnership with Angel Oak is right on schedule – we have been actively working with them since our last announcement to prepare the Brightvine portal to support a variety of their asset classes that can take full advantage of the portal’s key features, including a more efficient securitization process, real-time data distribution between parties, and blockchain-validated documents.

CJ: How much have the chaotic last few months and the downward turn affected this partnership in general?

JV: Many large institutions have emerged as champions of blockchain technology in recent months, despite a downturn in the crypto markets. If anything, now more than ever it makes sense to use the best technologies to create the most secure, efficient and accurate financial infrastructure. We see our partnership with Angel Oak and the results of BFNS 2022-1 as the first of many exciting announcements in a long-term collaboration.

CJ: The real estate market has shown signs of slowing down recently, what do you think about this?

JV: We’ve heard pleas from government agencies and other organizations asking the private sector to step up and help with housing markets, and that’s what we want to do. Brightvine’s goal is to increase liquidity for mortgages, fixed income and real estate by building new technology infrastructure that can connect these markets with new forms of digital investors – whether rates go up or down, people will still need mortgages, and our role is to help drive efficiency in the back end of that financial infrastructure.

CJ: Do you think that as many crypto projects will fail in this cycle as in the last crypto winter?