Deutsche Bank-backed Taurus Partners With Teylor To Tokenize SME Loans In Germany

Last updated: December 14, 2023 01:53 EST
. 2 min read

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In a statement published on Thursday, the companies said that the collaboration aims to tokenize loans for small and medium businesses in Germany, jumping on the recent trend of asset tokenization across the crypto community. — Source: Pixabay

Taurus, a Swiss crypto custody firm supported by Deutsche Bank, has entered into a partnership with Teylor, a fintech lending platform based in Zurich and specializing in the German SME marketplace.

In a statement published on Thursday, the companies said that the collaboration aims to tokenize loans for small and medium businesses in Germany, jumping on the recent trend of asset tokenization across the crypto community.

Teylor’s credit portfolio tokens have the capability to be admitted for secondary market trading on Taurus’ TDX marketplace, the companies noted. This arrangement allows for the potential trading of these tokens on the secondary market, providing liquidity and investment opportunities.

“Private SME Debt has historically been an illiquid asset class as secondary markets are hardly accessible outside of the institutional investment realm,” said Lamine Brahimi, Managing Partner and Co-Founder at Taurus. “The Teylor ledger-based security now makes it possible for investors to commit smaller amounts and trade the token in our regulated TDX marketplace. Teylor also fits well into our ecosystem of regulated financial services providers with a solid track record.”

The tokenization process is facilitated through a Luxembourg-based investment vehicle and is designed to comply with both Swiss and European regulations, Brahimi noted. He added in an interview with Coindesk that Taurus’ new tokenized debt product would receive a “landmark” investment from some institutional investors in the next two weeks.

“TDX market is Taurus’ other business besides custody, and we have done 20-plus transactions,” Brahimi told Coindesk. “These include tokenized equity, debt, structural products and art. In terms of notional value, it’s over $1 billion so far.”

Teylor, which offers loans between 100,000 euros ($109,000) up to 1.5 million euros ($1.6 million) to German SMEs, is backed by investors like U.K. bank Barclays and investment manager M&G.

Patrick Stäuble, CEO and Founder at Teylor, noted that Teylor’s credit portfolio of SME loans is funded through private transactions with large financial institutions, with the company also regularly receiving inquiries from smaller offices and investors who seek to participate in their portfolio returns.

“However, the available capital of this investor class is typically not sufficient for a private transaction,” Stäuble said. “With the admission of the Teylor ledger-based security on the TDX platform, we can now offer a standardized investment product. Professional investors can simply open an account and trade our security token.” 