Digital asset lending platform outlines new framework in a bid to resemble securities market

Crypto lending platform’s master agreement framework similar to ISLA’s Global Master Securities Lending Agreements, ICMA/SIFMA’s Global Master Repurchase Agreements.

A digital asset lending platform is looking to set new industry standards with the launch of a framework using master agreements typically seen from incumbent capital markets bodies.

The Global Digital Assets Lending Agreement (GDALA) was developed by Lendingblock, with legal counsel and support from Norton Rose Fulbright.

The platform, targeting institutional investors, will use master agreements framework similar to ISLA’s Global Master Securities Lending Agreements, ICMA/SIFMA’s Global Master Repurchase Agreements and ISDA’s Master Agreements.

Lendingblock claims it is the first of its kind for the crypto market.

“As part of our journey to reinvent the traditional capital markets securities lending model, we saw an opportunity to also reinvent the legal framework that protects both parties in the exchange,” said Steve Swain, CEO, Lendingblock.

“Security and transparency for our institutional clients has been at the centre point of development in the lead up to our platform launch. As such, we sought guidance from Norton Rose Fulbright and collaborated to ensure that the agreements our clients use are of international and institutional standard and provide the security they need to transact in these markets today and beyond.”

In a statement, Lendingblock’s said the move “exemplifies the application of conventional capital markets frameworks to institutional crypto markets”.

The GDALA governs the terms of the loan transaction between a borrower and a lender, by providing a bilateral agreement between the accredited counterparties whereby both participants enter into a binding transaction.

The agreement also outlines the tri-party structure in Lendingblock’s lending exchange, whereby there is an acting security trustee to manage the risk on behalf of the counterparties. The collateral is provided under separate wallet security terms. 

“The introduction of the GDALA, not only supports the endeavours of Lendingblock, but leads the way for other industry bodies in the digital asset arena. This was a critical milestone for the launch of our platform, to support the lending and borrowing needs of our clients,” added Swain.