Mortgage fintech MQube has announced a landmark achievement, becoming the first fintech in Europe to tokenise a substantial volume of mortgage debt on the blockchain. The company successfully tokenised £1.3billion of mortgage assets via an EVM compatible chain, bringing its lending arm, MPowered (known for its One Day Mortgage™ offering), to the forefront of institutional decentralised finance.
The move marks a significant technical shift for the mortgage industry, potentially transforming the entire financial services ecosystem by digitising illiquid assets. Asset tokenisation involves converting tangible or intangible assets into digital tokens recorded on a secure, immutable blockchain ledger. While the process has been applied to stock, bonds, and real estate in the past, this marks the debut of mortgage debt on the blockchain in a European context.
Unlocking data integrity and auditability
For mortgage lenders, the immediate benefits of tokenising assets are concentrated on internal operations and regulatory compliance. Stuart Cheetham, chief executive officer of MQube, explained that the immediate value lies in data integrity and security, even before broader adoption.
“The benefits of tokenising mortgage debt right now, is that it allows mortgage lenders to achieve data integrity, transaction security and audit traceability,” Cheetham commented. He stressed, however, that while the foundation is laid, the scale of the opportunity depends on future regulatory shifts. “Once the necessary regulatory and operational framework is in place, and there is still a huge amount of work to be done here, the opportunity for the mortgage lending industry is huge.”
The ability to move mortgage assets onto the blockchain also introduces unparalleled efficiency. Cheetham noted the potential to radically overhaul one of the industry’s most cumbersome processes. He pointed to “the ability to transfer assets from one lender to another cutting out legal process in a remortgage case and saving thousands of pounds per remortgage transaction.”
A new securitisation market
The principal long-term benefit of the tokenisation of mortgage debt is the potential to pave the way for a new mortgage securitisation market via the blockchain. This process involves pooling mortgage debt into a tradable and investable mortgage security, offering immediate advantages to both financial institutions (FIs) and consumers.
For banks and non-bank lenders, the securitisation of this debt frees up capital that was previously tied down. This increased liquidity allows them to meet regulatory requirements more easily, enhance risk management, and critically, write more loans to grow their business. The knock-on effect for the consumer is reduced cost of borrowing and greater product choice due to increased competition and lending capacity.
Cheetham concluded by positioning the development as a foundational element in the company’s broader mission to modernise finance. “This is a remarkable development for our industry and we are proud to be at the forefront of this monumental shift,” he stated. “As a fintech business, we set out to reinvent the mortgage industry and now not only are we now delivering one day mortgages but we are seriously addressing how we can use the cutting edge of blockchain technology to transform the entire banking ecosystem.”
The successful tokenisation of £1.3billion in assets establishes a European precedent, demonstrating that even complex, highly-regulated assets like mortgage debt are ready for the digital efficiencies of the blockchain ledger.