But as dominant loan market incumbents drag their heels on technological initiatives such as distributed ledger/blockchain for lack of aligned incentives, other more niche areas of finance are marching on. This leaves problems for loans such as non-deterministic settlement times.

Projects to cut settlement times and deal with borrower defaults are still about, insists Emmanuel Aidoo, head of digital asset markets at Credit Suisse. But there has been less focus on them of late.

“We’ve focused on other areas of finance and are really proud of the success we have had with two live projects in particular,” says Aidoo. “The Deutsche Börse-HQLAX supports critical core function in repo and will ultimately allow for billions of dollars of bond/treasury swaps, highlighting risk and bringing transparency to collateral chains, while the Paxos Settlement Service has settled millions of US listed equity trades since it launched in February.”

Blockchain remains a draw for credit market participants, as illustrated by ex-Morgan Stanley securitised lending veteran Robert Hershy joining Figure Technologies in August. He says he was attracted by the prospect of working to help revolutionise the industry and adds there is clear evidence that using blockchain technology can reduce transaction costs. As such he is in discussions with loan originators, investors and banks across multiple asset classes, including products that Figure is a lender for: home mortgage refinancing, student loan refinancing and personal loans.

“We entered into a warehouse agreement with Jefferies, all of which was done on blockchain,” says New York based Hershy. “Jefferies said it was able to save 60 basis points of costs compared to traditional warehouse methods.”

According to Aidoo, when all blockchain projects are linked together they will result in a tokenised digital asset, with smart contracts that embed and enforce the logic of term sheets or agreements, regulations, taxes and transfer rights.