Belgium’s KBC Bank has revamped its Bolero crowdfunding offering using blockchain. Bolero isn’t your typical crowdfunding platform where you get rewards or invest in equity. It’s more of a crowd lending platform with SME bonds as the primary investing tool. Smaller to medium sized firms raise anything from a few hundred thousand to a few million euros. Going forward, these bonds will be tokenized bonds. However, it all happens behind the scenes and KBC doesn’t make a fuss about blockchain on the customer facing website.
Frankly, that’s as it should be. Blockchain is about the plumbing. For smaller bond issuances like those on Bolero, blockchain can bring efficiencies. In this case, smart contracts look after the fundraising, interest payments and principal repayment. Additionally, the bond and the cash are blockchain-based, so it supports atomic settlement.
The EU passed new crowdfunding legislation that came into force on November 10. KBC took the opportunity to refresh the existing web2 Bolero offering, given the new functionality required by the legislation. An added advantage is the EU law allows licensed platforms to provide services throughout the EU. Bolero has helped to raise €53 million across 96 campaigns since its 2014 launch.
Last year KBC issued a stablecoin, the Kate Coin, using Hyperledger Fabric. However, Bolero’s tokenized bonds are on an Ethereum compatible blockchain (probably Hyperleder Besu, to be confirmed). Technology provider Settlemint made sure it’s possible to settle the cash on one chain and atomically transfer the tokenized bond on the other digital asset chain.
“We incorporated blockchain technology into the Bolero Crowdfunding platform as part of an optimization strategy that benefits both entrepreneurs and investors,” said Steven Van de Sype, Commercial Director, Bolero. “SettleMint enabled this transformation, seamlessly integrating blockchain capabilities into our existing workflows and systems.”