BANKEX: Decentralizing Financial Services & Banking The World

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Blockchain and the banking systems are not enemies, they can coexist and collaborate to achieve the best results.

Securitization got a bad name after the 2008 financial crisis. The process of turning assets, in most cases debt, into securities definitely share a large part of the blame. Securitization involves assets that are typically illiquid such as subprime mortgages; which are home loans issued to individuals with a low credit rating.

Since the assets from mortgage loan are considered illiquid assets because they are impossible to sell directly, securitization turns these illiquid assets (mortgages) into liquid assets.

The mortgage-backed securities that soured during the 2007 was triggered by the increased inflation which forced The Fed to increase interest rate. House prices which previously overvalued are now depreciated. The result is people cannot afford to pay their mortgages because of the high interest rates and their houses were repossessed.

Securitization is not entirely bad, without the securitization of mortgages, smaller investors may not be able to afford to buy into a large pool of mortgages. Investors of these type of securities are usually paid over the life of the deal from the cash flows generated by the portfolio assets.


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The real problem is lack of transparency of information among financial market agents which led to the subprime crisis. Interbank lending became more difficult given the mutual distrust amongst large banks. Those financial secrets and hidden losses resulted to market panic and the collapse of the entire banking system.

An alternative solution is desperately needed. A commitment to transparency of information and to make it easier for interested parties to view and evaluate the documents in regard to capital, risk exposure, and evaluation process. The method of equalization of the published data will lead to more openness and to a less secrecy.

Banks who were heavily invested in mortgage assets in 2007 began to experience a liquidity crisis. These entities were vulnerable because they securitize (make liquid) noncommercial mortgages which actually illiquid assets. These types of securities were non-fungible assets because they can not easily exchanged for money or other financial instruments.

Non-fungible assets are assets that are not interchangeable. Some examples of non-fungible assets are individual mortgages, debt of individual firms or used vehicles. For example, used cars, are not fungible. A 1916 Dodge Sedan is not just as good as another. It is important to identify each car, because they all have different conditions, different histories, etc.

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The problem is most assets are not fungible, one asset is not just as good as another. It is vital to identify each asset, and to do so beyond the boundaries of any banking systems around the globe. This is in essence the asset identification problem: the inability to identify non-fungible assets across the world.

To solve the issue of non-fungible asset liquidity, BANKEX build a Proof-of-Asset protocol. Proof-of-Asset ensures that the token issued as part of the protocol is backed by an actual asset. The protocol is capable to evaluate every asset anywhere in the world, based on the collective wisdom of all trading participants, as the increase in volume of transparent and authentic trade operations provides more information that can be used by the market to verify the assets. This will provide instant audit of the asset.

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The process of tokenizing assets opens up new avenues for liquidity as less liquid assets can be tokenized and traded, used as collateral for loans, and shared among multiple owners. The tokenization of illiquid assets can reduce the illiquidity. Asset Tokenization is different with current fundraising models because the token holders can retain fractional ownership of the asset.

The beauty of BANKEX Proof-of-Asset protocol is the ability to tokenize different types of assets as it has modular structure.

Similar to how securitization works, BANKEX tokenized the non-fungible assets on the blockchain and turning it into “Smart Assets”. Before a Smart Asset can be tokenized it must go through several steps:

  1. Validation of the asset
  2. Audit of the Validation Data
  3. Legal and
  4. Proposal (Issuing the Tokens).

A non-fungible asset can be legally represented by a crypto-token on a blockchain, legally changing ownership entirely, in a matter of hours with a full audit trail.

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BANKEX also standardized the end-product, which would allow to isolate meta-information when creating the smart-asset. This is to allow trading assets to other assets just as how fungible assets can be exchanged into other commodities or equivalent assets.

The lack of trust and transparency in financial markets was a significant contributor to the 2008 financial crisis. To prevent it from happening again, BANKEX Protocol giving users the ability to withdraw the asset from ownership if the terms of the contract are not fulfilled. This means that users have the option to withdraw the asset along with a certain value as a form of collateral if the terms are not being fulfilled.


Bank-as-a-Service on Blockchain

Over the past decades, banks have taken long amounts of time to build their systems. Banks have spent millions of dollars on computer program while integrating their systems with 3rd parties has been very laborious.

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Banking as a Service (BaaS) is a method of end-to-end process which taking complex applications and ensuring the integration and delivery of financial services where people pay for what they use. It allows users to create and consume value. On the other hand, developers can extend platform functionality using APIs and create value on the platform for customers to use when they need them.

BaaS simply serves as the underlying infrastructure that enables users to interact with each other

Banks need to partner with fintech companies who have the expertise in blockchain and cryptographic applications to achieve scalable and sustainable competitive advantages.

BANKEX is Bank-as-a-Service on blockchain, building the Proof-of-asset-Protocol. Users can add any level of complexity to the asset tokenization chain which will result in a Smart Asset. Blockchain Service Architecture will allow users to build, in the best way, a product line fitting with the trend of personalization and to offer unique solutions to consumers exactly when they really need it.

Blockchain reduces counterparty risk, increases liquidity, and connects people from all over the world. It can offer real-time transfers, lower cost and accuracy of identity checks. With the ability to monitor asset conditions and potential financial risks in real-time.

BANKEX Protocol has the ability to perform regular audit of the asset which significantly increases the quality of asset monitoring. It is a powerful competitive advantage compared to the Big Four (Standard & Poor’s (S&P), Moody’s, Fitch Group and Morningstar, Inc) and other rating agencies. Annual evaluation by auditors is replaced with what is essentially a real-time audit.


Banking The World

Argentina is one of the large unbanked populations in the world, followed by Colombia and Pakistan. More than two billion people worldwide do not have a bank account or access to a financial institution.

People are usually banked depends on how wealthy they are. In the poorest countries, only rich customers can get access to good banking. The poorest usually use informal or alternative financial services outside the formal ones. Banks are more likely to seek out customers with a steady income.

Recent research indicates that those who own bank accounts are more likely to own other assets including accounts related to savings, credit, and insurance. Those without bank accounts are less likely to own a home and a car.

BANKEX aim to provide a solution to this problem by providing the unbanked population with the same level of financial access. This condition is ensured by using Bank-as-a-Service on blockchain technology to allow anyone, anywhere to apply for financial services through smart contract instead of visiting a bank.

BANKEX Proof-of-Asset Protocol also allows anyone to tokenize everything: cars, houses, paintings, crafts, diamonds, institutional infrastructure. Tokens are sold on the market at the highest speed possible. And that means even the unbanked population could earn more money.

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BANKEX wants to improve lives and build a better future, while also seeing a good return on client’s investment.




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